Mumbai: Thursday will go in history books as the worst trading session in the history of Indian equity markets. In a single trading session, the BSE Sensex skittled by 2,919.26 points or 8.18 percent to quote 32,778.14. The fifty scrip sensitive Nifty50 on the National Stock Exchange was down by 868.25 points or 8.30 percent at 9,590.15.
With this, heavyweight indices such as Nifty50 and BSE Sensex at 30 month lows. Sensex clawed to levels of 32,000 as early as October'17.
Thursday's trading session on BSE eroded wealth worth Rs 11.26 lakh crores (BSE Mcap is estimated at 125.87 lakh crores). Here's worst sessions so far on the Sensex:
Sensex heat-map post trading hours.
On Thursday, none of the stocks on Sensex gained. Asian Paints with a 1.72% intra-day loss was among the leaders of the pack while SBI with 13.23% loss was the top in the losers segment. Heavyweight stocks such as Reliance Industries Limited and HDFC Bank saw heavy selling pressure with tens of lakhs of shares being sold.
Overall, the trend was highly bearish with 2,243 declines, 224 advances. 1,180 hit 52wk lows as against 13 52wk highs. The India VIX volatility index on NSE was up by 30.44% reflecting the severe volatility in the markets.
On the broader side, all indices ended with a 8 percent intra-day loss baring BSE 150 Midcap Select (down by 7.81%) and BSE 250 Smallcap (9.04%). Among sector specifics, the damage was in range of -7 to -9 percent. Telecom sector stocks saw a rout of 5.25 percent while Oil & Gas and energy stocks were among the larger themes dumped by stockholders.
The plunge was in line with what was observed across global indices after the World Health Organization (WHO) declared coronavirus a global pandemic. Here's a look at which index slumped by what margin:
• Dow Jones Industrial Average: Down by 1,464.94 or 5.86% at 23,553.22
• S&P 500: Down by 140.85 or 4.89% at 2,741.38
• Hang Seng Index: Down 929.40 or 3.68% at 24,302.21
• Nikkei 225: Down by 4.4% to 18,559.63.
• S&P/ASX 200 (Australia): Down 7.4% to 5,304.60.
• Kospi (South Korea): Down 4.7% to 1,817.87.
• Shanghai Composite index: Down 1.9% to 2,912.33.
The marauding on Thursday has resulted in investor wealth dwarfing by Rs 34.7 lakh crores in 52 days flat. BSE's highest market capitalisation was recorded on 17 Jan 2020 at Rs 160.57 lakh crores. On Thursday this came down to Rs 125.87 lakh crores.
The reasons for one-fourth the loss in mcap is Foreign institutional investors selling positions, impact of coronavirus on corporate earnings, dampened outlook on sectors such as travel and tourism, Yes Bank saga, crash in oil markets and a sudden spurt in the US greenback.
Global markets reeled after the World Health Organization (WHO) termed the coronavirus outbreak as a pandemic, and expressed deep concern over the "alarming levels of inaction". US President Donald Trump suspended all travel from Europe, excluding the UK, to the US for the next 30 days to stop the spread of the virus.
Deepak Jasani Head for Retail Research at HDFC Securities observed that the session also reflected the selling by FPI (foreign portfolio investors). He said, "This could reflect higher selling by FPIs amidst huge volumes in the markets. Relative valuation, FPI ownership and liquidity in the markets may have resulted in Indian markets underperforming the other Asian markets today. Markets opened with a downgap, made one long attempt to recover from the lows but failed."
He added, "Global recession risk is rising and the markets do not seem to be pricing that in fully. January was the third month in a row that the three-month measure of UK GDP showed zero growth, the weakest such run since the middle of 2009. In Q1CY20, on an annualised basis, global growth could be deeply negative - more like -1 percent."
Amit Gupta, Cofounder and CEO at Tradingbells explains that for investors it is better to stay away for a while, "till the time the volatility settles and we can see some notable reversals."
He said, "In the short run, margin calls and stop losses are triggering panic selling in the market which is creating a cyclical effect as this is further pushing the stock prices downwards. At the same time, escalating tensions between the US and Russia over oil prices are pushing crude oil prices further down, and the same is escalated further due to travel bans across the globe. With fewer people travelling, airlines and tourism industry along with all ancillary sectors will take a hit and this will in turn not help oil prices gain any momentum in the near-term."
"It is natural to be induced towards averaging your portfolios or buying fresh stocks, however we are advising our clients against this and wait for the tide to settle before re-entering the markets, which will be a really good time to start investing for the long term. At the moment, investors must look at stocks which have not fallen as much from their highs, as these are the ones which could withstand the wind better than the others due to their strong fundamentals. We will be releasing a list of such stocks shortly to our investors based on their low-to-high ratios."
Meanwhile, some trending tweets:
Q)Bhai market mein kya le rahe ho abhi?— Arun Mukherjee (@Arunstockguru) March 12, 2020
Ans) Bhagwan ka nam..
#Rupee drops by 82 paise To 74.50 against Dollar, #Sensex crashes 3000 points— Shama Mohamed (@drshamamohd) March 12, 2020
PM Modi, who showed so much concern for the Rupee's health in 2013, is now silent when the Rupee is close to passing away & the stock market has crashed#StockMarketCrash2020
Unemployment at all time high. Economy at all time low. Banks & sensex collapsing daily. Violence on the streets. Corona Virus panic all around.— Prashant Bhushan (@pbhushan1) March 12, 2020
But Govt busy with hugging Trump, divisive communal propaganda, buying MLAs & pulling down opposition govts. Truly Modi's Acche Din!
Sensex has crashed for more than 3000 pts, about to hit lower circuit. This is the biggest fall in the financial history of India. This was evident with Jokers running the Govt. We need intelligent politicians & economists to lift our country up!#गिरता_रुपया_खस्ता_अर्थव्यवस्था pic.twitter.com/lJ8XdyyPoh— Gaurav Pandhi (@GauravPandhi) March 12, 2020
Horrible markets. There is more pain to come, surely. Not great time to catch falling knives, but definitely time to create an allocation plan to higher equity— Deepak Shenoy (@deepakshenoy) March 12, 2020
What a market and what a day. I have said often that I expected volatility. But in no way could I have expected something of this magnitude.— Deepak Shenoy (@deepakshenoy) March 12, 2020
Caught wondering what's wrong, here grab some much-needed optimism from Porinju: