Domestic equity market crashed on Friday, on fears that a viral outbreak that began in China will weaken the world economy. The barometer index, the S&P BSE Sensex, slumped 1448.37 points or 3.64% at 38,297.29, its lowest closing level since 11 October 2019. The Nifty 50 index shed 431.55 points, or 3.71% to 11,201.75, its lowest closing level since 7 October 2019.
Selling was wide spread as sellers outpaced buyers. The S&P BSE Mid-Cap index fell 3.13% while the S&P BSE Small-Cap index fell 3.52%.
On the BSE, 456 shares rose and 2011 shares fell. A total of 153 shares were unchanged.
With today's slump, the Nifty 50 index has fallen 7.62% and the Sensex has plunged 7.32% in six sessions. The Nifty is down 9.88% from its record high of 12,430.50 hit on 20 January 2020.
Sharp foreign fund outflow in the past few sessions also spoiled sentiment. Foreign portfolio investors (FPIs) offloaded Indian shares worth Rs 3064.80 crore on Thursday, taking their total sales to Rs 8,897.94 crore in four days.
Investors were also cautious ahead of the India's December quarter gross domestic product (GDP) numbers to be released later today, 28 February 2020. ICRA expects that the Indian economic growth may display a mild improvement. It estimates annual economic growth at 4.7% in the October-December 2019 quarter, marginally higher than 4.5% in the previous quarter.
Numbers to Track:
In the foreign exchange market, the rupee depreciated against the dollar. The partially convertible rupee was trading at 72.1725, compared with its previous closing low of 71.61.
The yield on 10-year benchmark federal paper fell to 6.371% compared with 6.378% in the previous trading session.
In the commodities market, Brent crude for April 2020 settlement was down $1.25 to $50.93 a barrel. The contract fell $1.25 or 2.34% to settle at $52.18 a barrel in the previous trading session.
MCX Gold futures for 3 April 2020 settlement rose 0.23% to Rs 42,484 as investors rushed to safe haven counters following a rapid spread of coronavirus cases throughout the world.
Foreign Markets:
Shares in Europe and Asia fell across the board on Friday. Japan's Nikkei sank to into correction territory as coronavirus fears continued to rattle global markets.
New COVID-19 cases have sprung up around the globe in recent days, with trade and industry threatened by mass quarantines and shutdowns.
Japan's Nikkei 225 plunged 3.67%. Data on Friday showed retail sales in Japan declining 0.4% year-on-year in January.
US stocks plunged for a sixth straight day on Thursday as all three benchmark indexes closed in correction territory. Investor fears are being driven by complete uncertainty as to how much the Chinese economy is being impacted and the subsequent effect on global supply chains.
Buzzing Indian Segments:
The Nifty Metal index slumped 7.34% to 2,233.05. The index is down 9.61% in three trading sessions.
Vedanta (down 12.64%), JSPL (down 8.59%), Tata Steel (down 7.57%), JSW Steel (down 7.22%), Hindalco Industries (down 7.13%), Hindustan Copper (down 6.85%), SAIL (down 6.2%), Hindustan Zinc (down 5.62%), NMDC (down 4.84%) and NALCO (down 3.46%) slumped.
The fall is primarily driven by the coronavirus spreading from China to South Korea and other countries, which triggered selling of risk assets such as industrial metals. Underlying metals consumption in China, northern Italy, Korea and a number of other regions is reportedly being impacted. China is the largest producer and consumer of industrial metals.
The Nifty Auto index tumbled 3.76% to 6,909.05, extending losses for fifth consecutive session. The index has slumped 10.25% in five sessions.
Tata Motors (down 11.03%), Ashok Leyland (down 8.15%), Mahindra & Mahindra (down 7.5%), Escorts (down 4.58%), Hero MotoCorp (down 2.99%), Eicher Motors (down 2.63%), Bajaj Auto (down 1.6%), TVS Motor Company (down 1.25%) and Maruti Suzuki India (down 0.03%) slumped.
India's automotive supply chain could get disrupted if the manufacturing activities in China continue to remain impacted owing to the coronavirus outbreak. India reportedly sources 27% of its auto components imports from China.
Stocks in Spotlight:
IndusInd Bank slipped 1.04%. The Reserve Bank of India (RBI) has approved the appointment of Sumant Kathpalia as IndusInd Bank's chief executive officer (CEO), with effect from 24 March 2020, for three years. Kathpalia, who heads the bank's consumer banking business, will succeed Romesh Sobti.
Motherson Sumi Systems fell 4.67%. The auto ancillary said ratings agency S&P Global has re-affirmed long term credit rating at BB+ and revised its outlook to negative for Samvardhana Motherson Automotive Systems Group B.V, a subsidiary of Motherson Sumi Systems.
Lemon Tree Hotels lost 3.97%. The company launched its first hotel in Bhutan. This is company's second international destination.
NTPC slipped 2.29%. The company started commercial operation of 250 MW unit of Barauni Thermal Power Station. With this, the commercial capacity NTPC and NTPC group is 48,895 MW and 57,356 MW respectively.
ONGC and HPCL have entered into a share purchase agreement dated 27 February 2020 with consortium of eight nationalized banks, which hold stake in Petronet MHB, for acquisition of 9,48,22,632 equity shares, corresponding to 17.28% stake, of Petronet MHB for Rs 185.38 crore.
Prior to acquisition, ONGC and HPCL held 32.72% each in the company. Post acquisition, ONGC and HPCL will hold 49.99% stake each in Petronet MHB. The acquisition is expected to be completed during the quarter ending 31 March 2020. The consideration for the transaction will be paid in cash.
Shares of ONGC lost 1.45% while HPCL fell 3.42%.
KIOCL tumbled 9.48%. The company received environmental clearance for setting up non-recovery coke oven plant of 0.18 million tonnes per annum within the existing premises of blast furnace unit at Mangalore, Karnataka. The announcement was made during market hours today, 28 February 2020.
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