The markets started on a weak note with the Sensex plunging 778 points in intra-day trade but recovered towards the fag end of the trading session.
Equity markets on Wednesday slipped into the red after Union health minister Harsh Vardhan confirmed that the number of novel coronavirus cases has risen to 28 in India. The decline in equity markets comes despite positive global cues on the back of Fed rate cuts. The benchmark Sensex declined 214.22 points, or 0.55%, to close at 38,409.48 points.
The broader Nifty50 settled 0.46% lower to close at 11,251.00 points. The markets started on a weak note with the Sensex plunging 778 points in intra-day trade but recovered towards the fag end of the trading session. Deepak Jasani, head of retail research, HDFC Securities, observed that the markets could have recovered towards the fag end of the trading session after traders started to cover up their short-sell after European markets had a positive start.
The biggest gainers were Sun Pharmaceutical Industries, Asian Paints and Tech Mahindra whereas the biggest losers were IndusInd Bank, Bajaj Finance and ITC. Shares of Sun Pharmaceutical were up 3.14% to close at `405.70 a piece. Select pharmaceutical stocks rallied in the day’s trade after the government restricted the export of some active pharmaceutical ingredients (API).
Foreign portfolio investors (FPIs) have remained net sellers in Indian market. FPIs have sold equities worth $ 2.3 billion. The market breadth was negative with BSE Midcap and BSE Smallcap falling 1.61% each. Sectorally, the biggest losers were BSE Bankex, followed by BSE finance, each falling 1.6%. The Dow Jones declined on Tuesday even after the Fed decided to cut interest rates by 50 basis points (bps).
But, it is noteworthy that most Asian markets including Taiwan, China and South Korea were trading in the green. South Korea’s Kospi gained 2.24%. The European markets were off to a positive start with bourses in Germany, United Kingdom and France trading in the green. Ambareesh Baliga, independent market expert, observed that markets declined after the first shutdown due to coronavirus in India, which caused panic selling.
“If coronavirus spreads, as in the case of China, then economic activity will come to a halt and that will lead to a further economic slowdown,” he added.