Selling pressure was seen in sectors like Oil & Gas, Auto, Banks, Energy, IT, Consumer Durables, and capital goods stocks.
It looks like we are staring at a manic Monday as both Sensex and Nifty50 closed with deep cuts, tracking a weak trend in other Asian markets.
The BSE Sensex plunged 3,934.72 points or 13.15 percent to close at 25,981.24, while the Nifty50 plunged 1,135.20 points or 12.98 percent to 7,610.25.
Selling pressure was seen acros sectors including banks, Energy, FMCG, Healthcare, IT, Auto, Capital Goods, Consumer Durables, Metal, Oil & Gas, Realty.
The Indian rupee breached 76 against the US dollar for first time, closing 108 paise down at 76.27 a dollar on account of steep fall in equity and FII selling.
The Nifty50 closed the week ended March 20 with losses of over 12 percent while the bigger carnage was seen in the broader market space.
Tracking the volatility in the market which has so far eroded more than Rs 60 lakh crore in terms of market capitalisation on the BSE in the last one month, Sebi introduced a certain measure to curb volatility.
In order to curb the extreme volatility witnessed in the stock market, SEBI has introduced measures such as revising the market-wide position limit to 50 percent which will reduce fresh short positions in individual stocks.
"Tightening rules on short selling can bring down the excessive volatility during times of crisis like this. Therefore, it is to be welcomed. However, there can be unintended consequences during panics,” Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services told Moneycontrol.
“The market is now oversold. The short-covering may lead to sharp volatility. Also, when liquidity is low, selling in the cash market can lead to a crash in prices,” he said.
Here is a list of top five factors which could be weighing on markets:
Global stocks crumble:
Asian shares tumbled as a rising tide of national lockdowns threatened to overwhelm policymakers’ frantic efforts to cushion what is likely to be a deep global recession, said a Reuters report.
China's Shanghai Composite, Hong Kong's Hang Seng, Australia's ASX 200 and South Korea's Kospi closed lower by 3-6 percent.
Partisan battles block US Senate coronavirus bill:
Partisan battles in the U.S. Senate on Sunday stopped a coronavirus response bill from advancing, even as negotiations continued over Democrats’ demands for more federal funding for medical care and state and local efforts to combat the outbreak, said a Reuters report.
The measure faltered after it failed to get the necessary 60 votes in the 100-member chamber to clear a procedural hurdle after days of negotiations, it said. The failure of the measure to move forward sends Democrats and Republicans back to the bargaining table.
Rise in Coronavirus cases:
The global death toll exceeded over 13,000 with around 300,000 infected cases. Nearly one in three Americans were ordered to stay home on Sunday to slow the spread of the disease, while Italy banned internal travel as deaths there reached 5,476, said a Reuters report.
In India alone, Coronavirus cases jumped over 300 forcing the centre and state governments on March 22 to announce a complete shutdown of 75 districts across the country where COVID-19 cases have been reported.
All inter-state buses, passenger trains, and metro services have been suspended across the country till March 31.
Automakers halt production:
India’s biggest automaker Maruti Suzuki India and peers including Mahindra & Mahindra, Mercedes-Benz, Fiat Chrysler Automobiles (FCA) as well as Hyundai Motor Co said they will halt car production in the country due to the coronavirus outbreak, said a Reuters report.
The move comes after automakers shut plants last week in Europe, the United States, Canada, and Mexico as the global death toll from coronavirus exceeded 13,000, the report added.
FII selling continues:
FIIs net sold Rs 20,908 crore worth of shares in the week ended March 20, taking the total to Rs 51,243 crore in March so far. It was the biggest ever monthly outflow.
They also pulled out more than Rs 52,000 crore from the debt market in the month so far. As a net, they withdrew more than Rs 1.03 crore from India, said a Moneycontrol report.
FIIs have consistently been net sellers to the tune of Rs 62,611.82 crore from February 24, which was over USD 8 billion in dollar terms (at 75.20 per dollar rate).
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