Backed by rampaging coronavirus and plunging crude oil prices, the stock markets plummeted 5 percent on Monday. The S&P BSE ended the day at 35,635, lower by 1,942 points or 5.1% and the Nifty finished at 10,451, down 538 points or 4.9%. The broader markets have faced a crash, with the BSE Midcap index shedding at 13,554 percent and the Smallcap index losing 4.2 percent at 12,770. The Sensex has suffered its biggest loss since August 2015, in percentage terms. All the sectoral BSE indices ended up in red, with oil marketing firms and banking stocks among the worst affected. The largest contributor to the decline in benchmark indices was Reliance Industries.
During the day, the Sensex plunged more than 2,400 points to reach 35,109 on the downside and the wider NSE Nifty index fell to as low as 10,294, down more than 700 points before making a marginal recovery towards trade end.
The coronavirus is quickly taking on pandemic proportions. It has spread steadily across the globe, with the number of infected people worldwide reaching the 1 lakh mark across 100 countries out of a total of 194 constituent United Nations countries. In India, the number of people infected has risen to 44 since in the past 24 hours 5 more people have tested positive.
The India VIX index of the NSE –which gages the expectations of the markets for volatility in the near term–extended its recent gains by another 20 percent to the 30 mark.
There was chaos in the oil markets after a trade war with Russia started in Saudi Arabia by cutting its sales rates and threatening to unleash pent-up production on the market. Brent crude futures fell to $31.02 a barrel as much as $14.25, or 31.5 percent. That was the largest percentage decline since January 17, 1991, when the Gulf War ended, and the lowest since February 12, 2016.
Asia-wide equity markets dropped, with MSCI’s broadest Asia-Pacific share index falling 3.0 percent to a five-month low outside Japan, Japan’s Nikkei dropping 4.7 percent, and Australia’s commodity-heavy market dropping 5 percent.
European indexes, including the CAC, DAX, and FTSE, had reductions in early trades ranging from 4-8 percent each. The US market futures also look at the opening bell with huge losses, with the Wall Street E-Mini futures plunging 4.6 percent. Crude oil prices have nosedived 31.5 percent to $31.02 a barrel in their largest percentage fall since the beginning of the Gulf War.