The Indian stock market plunged into bear territory on Thursday, with the blue-chip Nifty 50 sliding to its lowest in over 2-1/2 years, after the coronavirus outbreak was termed a pandemic and the United States suspended travel from Europe.
The NSE Nifty 50 index and S&P BSE Sensex fell over 7.5% each to 9,648.65 and 32,990.01, respectively. While the Nifty marked its biggest intraday drop since October 2012, the Sensex recorded its largest daily fall in over a decade.
“The very fact that the WHO has called the outbreak a pandemic is a cause for worry for investors, especially since this comes against a backdrop of a slowing Indian economy,” experts said.
The Indian economy expanded at its slowest pace in more than six years in the last three months of 2019, with the recent collapse of a big bank adding to complications.
“India entered 2020 with a massive demand problem, and that has been worsened now. This is a wash-out year for markets,” Advisory said.
The rupee weakened as much as 0.8% to 74.35 against the dollar, its weakest level since October 2018, while the benchmark 10-year bond yield ticked up to 6.19%.
Markets around the world were stunned after U.S. President Donald Trump suspended all travel to the United States from Europe, except from the United Kingdom, for 30 days starting Friday.
U.S. S&P 500 futures plunged as much as 4.9%, while Euro Stoxx 50 futures tumbled 8.3% to mid-2016 lows. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 3.2%.
India too said it would suspend a vast majority of visas to the country to contain the virus.
All stocks on the blue-chip indexes in Mumbai were trading in the red, dragged down mostly by large-cap energy and financial shares.
Top private-sector lender HDFC Bank Ltd caused the biggest damage to the indexes, sliding 9.5% to its lowest since Nov. 2018.
Fund managers and market analysts said the bulk of selling came from foreign institutional investors.