The S&P BSE Sensex and NSE Nifty 50 indexes crashed in noon trading as private sector banking shares witnessed sharp selling pressure.
Mumbai| S&P, a global rating agency, has slashed India’s growth forecast for 2020 to 5.2 per cent, citing the impact of the novel coronavirus on the country’s strained economy.
S&P Global Ratings also mentioned that the global economy at large is entering a recession amid the coronavirus outbreak.
“We lower our forecasts for China, India, and Japan for 2020 to 2.9 per cent, 5.2 per cent and -1.2 per cent (from 4.8 per cent, 5.7 per cent, and -0.4 per cent previously),” S&P said.
Just a day ago, Moody’s Investors Service had lowered India’s economic growth forecast for 2020 to 5.3 per cent in the wake of the virus outbreak.
Sell-off intensified in the Indian equity markets, mainly in bank stocks, in the afternoon session, sending the headline indices tumbling over 4 per cent to a three-year low level. The fall led to the market-capitalisation of BSE listed companies getting reduced to Rs 114.48 trillion, its lowest level since February 15, 2017
The S&P BSE Sensex gave up the 30,000-mark and dropped as much as 4.55 per cent or 1,447 points and the NSE Nifty 50 index slumped as much as 408 points or 4.55 per cent to hit a fresh three-year low of 8,545. The Nifty had opened the session above 9,100 levels before quickly heading south. HDFC twins, Kotak Mahindra Bank, Axis Bank, ICICI Bank and IndusInd Bank were among the biggest drags on the Sensex.
What started with supply disruptions due to the outbreak in China has now brought economic activities to a standstill in many countries. From the US to most Asian countries, stock markets have duly reflected the gloomy mood.
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“Whenever this kind of correction happens it takes 10-13 months for a meaningful bottom to be made and we did not see a reasonable correction since 2008 and one should not expect a recovery any time soon,” AK Prabhakar, head of research at IDBI Capital Market told NDTV.
“Nifty can go down to 7,000 odd levels, as well,” he added.
Nifty has so far this year nosedived 30 per cent and the Sensex has crashed 29.38 per cent.
IndusInd Bank was top Nifty loser, the stock crashed 32 per cent to Rs 409 as traders feared about its high exposure to the telecom space. Bharti Infratel, Bajaj Finance, Grasim Industries, Axis Bank, Bajaj Finserv, Kotak Mahindra Bank, JSW Steel, Hero MotoCorp and Bharat Petroleum were also among the losers, down 6-17 per cent.
On the flipside, Zee Entertainment, ITC, Yes Bank and TCS were among the notable gainers.
The overall market breadth was extremely bearish as 1,930 shares were falling while 335 were advancing on the BSE.
As the situation stands in India as of Wednesday, a total of 148 people have been infected by the virus and three people have died after testing positive. Globally, the death toll has crossed 7,500 and over 1.8 lakh infections.
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