Investors lose over Rs 3 lakh crore in share market today, as Coronavirus spreads beyond China

Kshitij Bhargava

BSE Sensex saw its worst trading session in more than three weeks, as investors lost more than Rs 3 lakh crore in the market as increased cases of the deadly Coronavirus, outside China, saw a sharp rise. South Korea, Italy and Iran have reported a huge spike in cases over the weekend. Market capitalisation of BSE-listed firms stood at Rs 158.5 lakh crore when markets closed on Thursday, the last trading day of the previous week, it was down to Rs 155.3 lakh crore at market closing on Monday.

Domestic Benchmark indices ended the day in red, following their global peers. S&P BSE Sensex ended 806 points or 1.96 per cent lower at 40,363, while the broader Nifty 50 index settled below the crucial 11,850-mark, at 11,838, down 242 points or 2 per cent. Nifty Metal, one of the biggest losers of the day, ended the trading session down by 140 points or 5.36 per cent. Nifty Pharma was down 3.09 per cent; and Nifty auto slipped more than 3.5 per cent. 

"Indian Indices took a severe beating today on the back of weak global cues accentuated by Coronavirus. Pivotals like RIL, HDFC and the entire Metal Sector bore the brunt of selling as the market undertone remained weak since opening and in fact profit booking accelerated post opening of the European Markets," said S Ranganathan, Head of Research at LKP Securities. Coronavirus cases in Italy have now jumped to over 150 from just 3 on Friday. South Korea has more than 800 cases and Iran, after reporting its first case just last week, now has 43 cases of the virus with 8 deaths.

Nifty 50 volatility index jumped more than 25 per cent today. Gold prices too hit a fresh high as investors jumped to invest in the yellow metal, considering it a safe bet as the world deals with an increasing number of Coronavirus cases outside mainland China. "Safe haven demand has reached an all-time high again. The sentiment is likely to be positive for intraday today," Jigar Trivedi, Fundamental Research Analyst-Commodities, Anand Rathi Shares and Stock Brokers said.

The grand welcome of US President Donald Trump in Ahmedabad failed to provide any clues to the domestic markets that were waiting for announcement of new deals between the two countries. Although, markets remain hopeful as Donald Trump's maiden visit progresses. "We expect the markets to be choppy in the near term as global sentiments continue to remain muted. In addition, F&O expiry could also induce some volatility during the week. On an optimistic note, any positive outcome from the US president's India visit in terms of strategic partnership/trade deal could possibly cheer the Indian markets," said Ajit Mishra, of Religare Broking Ltd.

Technical Observation

"After showing a lack of strength to sustain the highs on Thursday, the Nifty witnessed a sharp fall today and closed the day on a deep cut of 250 points. A long bear candle was formed today with a gap down opening. Today’s opening downside gap remains unfilled. This pattern indicates that the optimism created after the union budget 2020 seems to have nullified and the Nifty is currently into a down trended move," said Nagaraj Shetti of HDFC Securities.