The Dow Jones index of the US was on course for its worst performance since Wall Street's “Black Monday” crash of 1987, as President Donald Trump's move to curb travel from Europe added to growing corporate distress over the coronavirus
pandemic. The index was down over 8 per cent as of 12:20 am (IST).
The SGX Nifty slipped below 9,000 after the US market dropped in opening trade. This could mean another day of carnage in the Indian markets
when it opens on Friday.
“The markets are gripped by panic. Everybody is staring at uncertainty, with even mature markets like the US and Europe reacting violently. We are seeing a chain reaction,” said Motilal Oswal, chairman and managing director, Motilal Oswal Financial Services.
Market players said while valuations of many stocks had become attractive compared to historical levels, the uncertainty about the kind of damage the virus would cause to the economy and corporate earnings was stopping people from taking large buy positions.
“Everyone is worried about where the virus is going and what are the implications. It overshadows all the positives. No one knows what is happening to the world. It is more of fear of the unknown driving markets at the moment, and the fear negates any rational thinking,” said Andrew Holland, CEO, Avendus Capital Alternate Strategies.
Experts said overseas investors were offloading stocks at whatever value, fearing that the markets would fall further and it could be a long road to recovery.
Overseas investors pulled out Rs 3,475 crore on Thursday, taking their last 13-day selling to nearly Rs 37,000 crore. Domestic investors provided buying support to the tune of Rs 3,918 crore. Nearly half the 2,500 stocks that traded on the BSE
ended at at least their one-year low. Nearly 550 stocks got locked in lower circuit and nearly 23 stocks declined for every one that advanced.
In absolute terms, Thursday’s fall in the Sensex was the worst-ever, breaking the record for the worst fall in points term two sessions ago.
Index heavyweights such as HDFC Bank, Reliance Industries and HDFC dropped around 8 per cent each and dragged the Sensex lower by over 1,000 points. State Bank of India dropped 13 per cent, most among the Sensex components, followed by ONGC, which fell 12.6 per cent.
All the 19 BSE
sectoral indices fell. The oil, realty and banking gauges dropped over 9 per cent each.