Sensex Falls Over 300 Points, Nifty Struggles Above 12,000 As Selloff Across Sectors Deepens

Domestic stock markets moved lower on Thursday tracking weakness in Asian peers amid mounting evidence that the coronavirus epidemic was spreading its tentacles across China, threatening to disrupt the world's second largest economy. The S&P BSE Sensex index declined as much as 347.15 points to hit 40,851.51 on the downside, and the broader NSE Nifty benchmark slid to as low as 12,025.10, down 104.4 points from the previous close. Losses across sectors, led by banking, IT, energy and pharmaceutical shares, pulled the markets lower.

At 1:05 pm, the Sensex traded 315.21 points - or 0.77 per cent - lower at 40,883.45 while the Nifty was down 95.10 points - or 0.78 per cent - at 12,034.40. Forty stocks on the 50-scrip benchmark index traded lower at the time. 

Top percentage losers were Yes Bank, Zee Entertainment, Reliance Industries, Cipla, Sun Pharma and Bajaj Finserv, struggling with losses of between 1.90 per cent and 5.58 per cent.

On the other hand, Eicher Motors, Power Grid, Bharti Infratel, NTPC, ICICI Bank and HDFC - up between 0.35 per cent and 1.28 per cent - were among the top Nifty gainers. 

Reliance Industries, HDFC Bank and Infosys were the top drags on the Sensex, together accounting for a nearly 200-point fall in the index. 

Asian stocks slumped to a seven-week low and sovereign bonds rallied this morning. Among the Asian indices, Taiwan tumbled over 4 per cent as that market came back from a holiday. Hang Seng, Nikkei, Straits Times and Kospi indices lost between 0.2 per cent and 1.5 per cent each. The Chinese stock markets are shut till Monday. The death toll from the coronavirus has already risen to 170 and still counting. 

Wall Street, however, continued to gamble that the economic impact of coronavirus will remain limited. Overnight, the Dow Jones erupted higher by 65 points or 0.2 per cent to 28,788 and Nasdaq rose 0.2 per cent. Fed Reserve Chairman Jerome Powell said the outbreak of the coronavirus will hit the Chinese economy and even spill wider, but it was too early to assess its impact on the US economy. 

Analysts say the markets are likely to remain volatile until the government presents the Union Budget on February 1, when it may also unveil more measures to lift growth. The expiration of monthly derivatives contracts (F&O) due by the end of the session also added to volatility.

The market participants would also keep an eye on outcome of the ongoing US Fed meet and the Bank of England meeting scheduled on Thursday amid speculation that policy makers in UK may lower interest rates. And the U.K. will finally leave the European Union on Friday.

On the earnings front, FMCG companies such as Colgate, Dabur and Marico, besides Bajaj Auto, IOC and Tata Motors will declare their Q3 numbers during the course of the day.

In stock-specific movement, metal stocks declined on Thursday, with Tata Steel extending its recent losses by another 1.5 per cent at Rs 445, while Hindalco and Vedanta each lost more than 1 per cent. Among index bellweather stocks, RIL fell 1.1 per cent to Rs 1,462 and Infosys dropped 0.9 per cent to Rs 782. 

On the other hand, stocks of oil marketing companies (OMCs) are attracting buying interest, with IOC and BPCL gaining about 1 per cent each.

The S&P BSE Sensex had clawed back above the 41,000 mark and the Nifty had reclaimed 12,100 levels in Wednesday's session; the Sensex had closed higher by 232 points or 0.5 per cent at 41,198.66 and Nifty had risen by 74 points or 0.6 per cent to close at 12,129.50.