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Biggest single day fall since August 2015 wipes out Rs 5.53 lakh cr of investor wealth

The market breadth was largely in favour of bears as more than four shares declined for every share rising on the BSE.

February 28, 2020 / 04:29 PM IST

Indian shares were at more than four-and-half-month low on February 28, as global growth concerns mounted amid rising cases of coronavirus worldwide.

The bears remained firmly in control on Dalal Street for the sixth consecutive session, throwing out the bulls on the last trading day of February and first day of March series.

The BSE Sensex closed at 38,297.29, down 3.64 percent or 1,448.37 points, the biggest single day fall since August 24, 2015.

The market crash wiped out Rs 5.53 lakh crore of investors’ wealth, taking six-day losses to Rs 11.84 lakh crore.

The Nifty50 fell 431.50 points or 3.71 percent to 11,201.80, the lowest level since October 7, 2019.

The market breadth was largely in favour of the bears as more than four shares declined for every share rising on the BSE.

After China, which has seen 2,788 deaths and more than 78,824 infections, coronavirus cases have been rising in other countries, fanning fears of a pandemic and making investors jittery.

South Korea is the second largest infected country after China, reporting an additional 256 novel coronavirus cases, taking the total to 2,022 with unchanged death toll of 13. Cases were also reported from New Zealand, Nigeria and Iran, though infected cases and deaths declined in China from where the outbreak began.

The total infected cases across the world stood at 83,342 with 2,858 deaths.

"With cases of the new coronavirus disease rising quickly beyond China, the odds of the outbreak turning into a pandemic have now doubled — from 20 percent to 40 percent,” CNBC-TV18 quoted Moody’s Analytics as saying.

Previous assumption that the virus would be contained in China proved optimistic, and the odds of a pandemic were rising, the report added. It had earlier predicted a 20 percent chance of a pandemic.

Dan Fineman of Credit Suisse told CNBC-TV18 they had cut GDP forecast for China by 0.5 percent. "We should see a much bigger impact on earnings than that 0.5 percent," Fineman said.

In case of India, he said the country was not very much impacted by the virus. "For India, it's more domestic factors that drive our view which is fairly neutral on the market within an Asian context," Fineman said.

World markets reacted sharply, with Dow Jones falling more than 12 percent (3,581 points) in six consecutive sessions. Dow Jones futures fell over 260 points on February 28, indicating a weak opening later during the day.

Among Asian counterparts, Japan's Nikkei, Shanghai Composite, Hong Kong's Hang Seng, South Korea's Kospi and Australia's ASX 200 were down 2.4-3.7 percent at close.

Back home, more than 350 NSE stocks hit 52-week low, including ACC, ABB India, Apollo Tyres, Bandhan Bank, Bank of Baroda, IndusInd Bank, Hero MotoCorp, GAIL, Coal India, Wipro, M&M, Hindalco, Vedanta etc.

The broader markets had fallen in line benchmarks, with Nifty Midcap and Smallcap indices declining 3.27 percent and 3.83 percent respectively.

All sectoral indices ended in the red, with Metal being the biggest loser with over 7 percent loss followed by Nifty IT, Bank, Auto, FMCG, IT, Pharma and Realty, which lost 2-5 percent.

Sunil Shankar Matkar
first published: Feb 28, 2020 11:59 am