Worst Day In 7 Months For Sensex As Mutant Virus Spooks Global Markets

A selloff across sectors -- led by banking, financial services, automobile and metal shares -- dragged the markets lower

Tata Motors, ONGC and GAIL were the top laggards in the Nifty basket of shares.

Highlights

  • Sensex ends 1,406.73 points lower at 45,553.96, worst fall since May 4
  • New coronavirus strain is said to beup to 70%more transmissible
  • All 50 shares in Nifty basket fall, with Tata Motors, ONGC worst hit
Domestic stock markets suffered their worst single-day loss in more than seven months on Monday tracking a selloff across global equities over fears of a new coronavirus strain that shut much of the United Kingdom. The Sensex index dropped 2,037.61 points, or 4.34 per cent, to 44,923.08 at the weakest level of the day, and the broader Nifty benchmark tanked to as low as 13,131.45, falling 629.1 points, or 4.57 per cent, from its previous close. A selloff across sectors -- led by banking, financial services, automobile and metal shares -- dragged the markets lower.

Here are 10 things to know:

  1. The Sensex ended 1,406.73 points, or 3.00 per cent, lower to close at 45,553.96, whereas the Nifty settled at 13,328.40, down 432.15 points, or 3.14 per cent, from its previous close — the worst single-day loss for both indices since May 4. (Track Sensex, Nifty Here

  2. The news of the new coronavirus strain, said to be up to 70 per cent more transmissible than the original, has put some 16 million Britons under tougher lockdowns and has overshadowed US lawmakers' agreement over a long-awaited stimulus bill.

  3. All the 50 shares in the Nifty basket suffered losses. Tata Motors, ONGC, GAIL, IndusInd Bank, Hindalco, Indian Oil and Bharat Petroleum — closing between 7.21 per cent and 9.53 per cent lower — were the worst hit. (Also Read: Stocks To Watch

  4. Reliance Industries, ICICI Bank, HDFC Bank and HDFC were the biggest drags on Sensex. The four accounted for more than 500 points loss in the 30-scrip index.

  5. Analysts say the rally in the domestic markets was driven by liquidity, which is why any negative news warranted a deep correction.

  6. "It is a bit too early to say anything, but there could be more of this healthy correction in the coming days. The markets are highly leveraged and lack of follow-up buying by foreign institutional investors ahead of Christmas holidays caused the markets to fall of their own weight," AK Prabhakar, head of research at IDBI Capital Markets, told NDTV. "However, investors will always be waiting to buy in a bull market; so any major correction can only happen after the Union Budget," he added. 

  7. The NSE's India VIX index — which measures the markets' expectation of volatility in the near term — surged 24.52 per cent. The overall market breadth was extremely negative, with 2,430 shares listed on the BSE ending lower as against 594 that finished higher.

  8. Domestic equity benchmarks have surged more than 80 per cent from lows hit in March, powered by record inflows from foreign institutional investors (FIIs), progress on COVID-19 vaccines globally and signs of a domestic economic recovery.

  9. “Fresh concerns over the spread of coronavirus in the UK and Europe dragged the Indian markets... Lack of positive news flows has seen Indian markets taking a breather. After all, it has been a non-stop rally for past 50 days which started after US elections," said Jaideep Hansraj, managing director and CEO, Kotak Securities.

  10. Equity markets in other parts of Asia faltered on Monday, despite news that a deal had finally been struck on a long-awaited US stimulus bill. European shares started the day sharply lower, with the United Kingdom's FTSE 100 benchmark down 0.93 per cent at the last count. Britain Prime Minister Boris Johnson will chair an emergency response meeting on Monday to discuss international travel and the flow of freight in and out of the country.