Sensex plunges over 1,700 points, Nifty below 10,000, Dow over 1400

March 12, 2020
Mumbai, March 12 (IANS) The BSE Sensex plummeted over 1,700 points on Thursday tracking similar cues in the global markets after the World Health Organization (WHO) declared coronavirus as a global pandemic.

The Dow has plunged more than 1,400 points to end in a bear market in a continued wild session as coronavirus fears intensified on Wall Street.

All Asian indices also were trading in the red. WHO declared the disease a pandemic on Wednesday following which the Dow Jones Industrial Average also slumped significantly.

At 9.27 a.m., the Sensex was trading at 33,943.02, lower by 1754.38 or 4.91 per cent from its previous close of 35,697.40

It opened at the intra-day high of 34,472.50 and has so far touched a low of 33,876.13 points.

The Nifty50 on the National Stock Exchange was trading at 9,938.80, lower by 519.60 points or 4.97 per cent from its previous close.

The bear run in both the global and domestic markets has continued off late on concerns of the coronavirus outbreak severely impacting the global economy. It has also raised calls for government intervention and support.

Central banks in several countries, including the US Federal Reserve have announced emergency rate cuts to boost sentiments. However, the concerns have only deepened in the past few days as the number of COVID-19 cases across the world has increased.

Meanwhile, the Dow Jones Industrial Average on Wednesday shed 1,464.94 points, or 5.86 per cent, to 23,553.22. The 30-stock index fell into a bear market, down more than 20 per cent from last month’s record close, Xinhua reported.

The Dow, which fell by as many as 1,689.84 points at session lows, was the only index to close in bear-market territory. The S&P 500 decreased 140.85 points, or 4.89 per cent, to finish at 2,741.38. The Nasdaq Composite Index dipped 392.20 points, or 4.70 per cent, to 7,952.05.

Boeing stock nosedived 18.15 per cent, leading the Dow’s losses.

All the 11 primary S&P 500 sectors ended lower, with industrials falling 5.95 per cent, the worst-performing group.

The Cboe Volatility Index, widely considered as the best fear gauge in the stock market, surged 13.95 per cent to 53.90 on Wednesday.

On the bond market, the yield on the benchmark 10-year US Treasury note, which moves inversely with prices, rose to 0.82 per cent in volatile trading.

The World Health Organization (WHO) said on Wednesday that the COVID-19 outbreak can be characterized as a “pandemic” as the virus spreads increasingly worldwide, fuelling market fears that the continued spread of the virus would disrupt global supply chain and slow economic growth.

The WHO is “deeply concerned both by the alarming levels of spread and severity, as well as by the alarming levels of inaction,” said WHO Director-General Tedros Adhanom Ghebreyesus. He also urged the international community to take urgent and aggressive action to contain the pandemic.

The number of confirmed COVID-19 cases in the US has topped 1,000. Investors were expecting a quick round of fiscal stimulus package from Washington to cushion the economic damage by the coronavirus epidemic. However, the lack of a clear roadmap for the US stimulus plan did little to pacify the markets.

President Donald Trump said earlier this week that his administration was planning some “very dramatic” fiscal stimulus measures to support the economy.

The lack of specificity on what might be included in the plan, as well as concerns over the continued lack of cooperation on Capitol Hill, added to market jitters, experts noted.

“If it’s too broad-based and difficult to implement in the near term, markets will grow skeptical; if it’s too narrowly scoped and modest in scale, then markets will be disappointed,” UBS Global Wealth Management’s Americas Chief Investment Officer Mike Ryan said in a note, while commenting on the potential US fiscal stimulus plan.

“The package must be large enough to restore confidence, but targeted enough to provide immediate relief to where it is needed most,” Ryan noted.

Vicious market swing has become a routine for US equities these days. The Dow closed up more than 1,100 points on Tuesday, following a 2,013.76-point dip in the prior session.

The massive sell-off shortly after Monday’s opening triggered a key market circuit breaker on Wall Street and halted trading for 15 minutes.

Last week, the US Federal Reserve lowered the target range for the federal funds rate by 50 basis points to 1-1.25 per cent, its first emergency rate cut since the 2008 financial crisis as COVID-19 posed “evolving risks” to economic activity.IANS