The markets have opened in the red, in line with the Asian bourses, due to increasing concerns that global economic growth could take a sustained hit from rising number of coronavirus cases outside China. At 9.35 am, the BSE Sensex was quoting at 40,747, weaker by 423 points or 1 per cent and the Nifty was at 11,947, down 131 points or 1 per cent.
The broader markets are also trading weak, with the BSE Midcap index shedding 0.8 per cent to 15,560 and the smallcap index losing 0.4 per cent to 14,687. All the NSE sectoral indices are trading in the red, with metal and pharma indices losing more than 2 per cent each.
Stocks in South Korea led losses across Asia after the country raised its coronavirus alert to the 'highest level' following a recent spike in cases throughout the country. Elsewhere, the Shanghai composite was down more than 0.4 per cent and Hang Seng traded lower by 1.3 per cent.
Chinese President Xi Jinping said on Sunday the coronavirus epidemic is the country's "largest public health emergency". The death toll from the deadly virus has already climbed to 2,592. The IMF also warned that the deadly epidemic could put an already fragile global economy recovery at risk.
US stocks had fallen on Thursday, led by declines in technology heavyweights after reports of new coronavirus cases in China and other countries intensified fears over its spread and impact on the global economy.
The Dow Jones fell 128 points or 0.4 per cent to 29,219, the S&P 500 lost 12 points or 0.3 per cent to 3,373 and Nasdaq Composite dropped 66 points or 0.6 per cent to 9,750.
On the commodities front, oil prices plunged this morning; Brent crude futures were down 3 per cent to $56.73 per barrel and US crude futures contract dropped 2.7 per cent to $51.93 per barrel.
The market has been in a tight range for the last two weeks, post the earnings season, amid concerns over the rampaging coronovirus. In the previous session on Thursday, the Sensex had settled 152 points or 0.3 per cent, lower at 41,170 and Nifty had slipped 45 points or 0.3 per cent to 12,080.
Meanwhile, on a net basis, foreign institutional investors bought equities worth Rs 1,495.25 crore, while domestic institutional investors sold shares worth Rs 699.62 crore on Thursday, data available with stock exchanges showed.
Experts reckon that the markets may be volatile this week due to the expiry of February derivative contracts on February 27 and developments surrounding the coronavirus. The US President Donald Trump would be visiting the country for two days, i.e. February 24-25, and this would also be something to watch for.
Metal stocks are leading the slide on the NSE. Hindalco has nosedived 5.8 per cent to Rs 179 to top the loser's list on the NSE. Tata Steel, JSW Steel and Vedanta are the other significant losers, shedding between 3 per cent and 4 per cent each, on the NSE.
In the banking space, ICICI Bank has weakened by more than 2 per cent, while Axis Bank, HDFC Bank and Bank of Baroda have shed more than 2 per cent each.
And in the auto index, Tata Motors, Maruti Suzuki and Hero Motocorp have shed around 2 per cent each.
IT stocks are bucking the weak trend, with Infosys, Tech Mahindra and TCS gaining half per cent to 1 per cent each.
The market breadth is weak. Out of 1644 stocks traded on the BSE, there are 528 advancing stocks as against 1014 declines.