Top reasons why Sensex plunged over 1,300 points today

Benchmark indices opened gap-down on Friday and weakened further in the session, with the Sensex plunging more than 1,300 points and Nifty below its key psychological support level of 11,250. The stock markets around the world have crashed as it has become increasingly clear the virus will take a huge toll on the global economy.

Below are the reasons for the sharp decline in the Indian stock market today.

Global markets slump on virus fear: Wall Street finished lower for the sixth straight session on Thursday as investors fret about the global spread of the coronavirus epidemic and uncertainty about the economic impact. The Dow Jones Industrial Average tanked 1,191 points or 4.42%, to 25,766.60, the S&P 500 lost 138 points or 4.42% to 2,979 and the Nasdaq Composite slumped 414 points, or 4.61%, to 8,566.

Asian stocks were trading lower on Friday as fears about the novel coronavirus continue to spur a global sell-off. The Japanese Nikkei was trading down over 950 points as collateral selling saw across the board sell-off in stocks. The other casualty has been the South Korean Kospi index, which has been at the epicentre of the virus outside of China. The index lost over 3%.

Coronavirus news & impact: In China, the National Health Commission reported on Friday at least 44 new coronavirus deaths, bringing the number of fatalities nationwide to 2,788. Nigeria reported the first new coronavirus case in sub-Saharan Africa, also New Zealand health officials said the country had its first coronavirus case (a person in his 60s who recently returned from Iran). Lithuania's government also reported the country's first confirmed case of coronavirus in a woman who returned this week from a visit to Italy's northern city of Verona. Italy is the worst hit European nation by the virus, with its death toll at 17, while the numbers of those testing positive for the illness increased by more than 200, to 350. Coronavirus has killed more than 2,800 people and infected about 83,000 worldwide.

The global and domestic firms have hinted at a slowdown in sales due to the outbreak of Coronavirus. Apple and Microsoft have warned about the impact virus on earnings.

Dueing this week, TVS Motor announced a production cut, due to the ongoing Coronavirus outbreak in China. TVS Motor’s direct dependency on China is limited for components, some Tier II suppliers have been impacted adversely which will lead to 10% drop in the planned production in February 2020, the auto company said post-market hours on Monday.

GDP data in focus today: Investors will be looking forward to the Gross Domestic data for the third quarter of FY20 to be out today.

FIIs continue to sell: Foreign portfolio investors offloaded shares worth Rs3,127.36cr, data available with stock exchanges showed on Thursday, taking their total sales to nearly Rs10,000cr in the past 4-days.

Rupee & Gold updates: The rupee is trading at day’s low, depreciated 33 paise tracking heavy selling in domestic equities and sustained foreign fund outflows. On the other hand, gold prices were higher, Spot gold gained 0.2% to $1,645.79 per ounce and US gold futures rose 0.1% to $1,644.20.

Indian stock market: The BSE Sensex plunged 1,315 points or 3.3% at 38,430 and the broader NSE Nifty index was down 383 points, or 3.3% at 11,250. The Nifty Metal, metal, media and auto companies were among the worst hit, losing 3-6%, respectively. All stocks in the Nifty50 index were selling pressure with Vedanta, Tata Motors, Tata Steel and Bajaj Finance among the top losers.
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