The carnage of coronavirus at stock markets continued Friday as benchmark indices hit 10 per cent lower circuit, following which the trading was halted for 45 minutes. The S&P BSE Sensex was down over 3000 points to hit below 30,000 levels while the NSE barometer Nifty plummetted nearly 1,000 points or 10.07 per cent.

For the first time in at least three years, Nifty was trading below 9,000 at 8,624 points. The next circuit breaker limit for Sensex is 15 per cent or at 27,861 level, while for Nifty, it will be at 8,152.

sensex nifty
A man walks past a screen displaying news of markets update inside the Bombay Stock Exchange (BSE) building in Mumbai, February 6.Reuters

This was the first time since the 2008 global recession the Indian stock exchange went into the lower circuit. Besides India, the bear ran amok on other Asian markets as well and trading was halted in Indonesia Thailand, South Korea and Philippines markets. Nikkei was down 8.5 per cent, Shanghai 3.3 per cent, Hang Seng 6 per cent, Singapore 5 per cent and Kospi 8 per cent.

What caused the bear run on stock markets

The mayhem was caused due to the panic in investors over the impact of the rapidly spreading coronavirus, which has been declared a global pandemic by the World Health Organisation. The virus has killed more than 4,000 people across the world and over 1.2 lakh are infected. Experts believe that the global economy could be heading towards a big recession due to the coronavirus pandemic with several countries in lockdown.

The selloff caught pace after the World Health Organisation declared the virus outbreak a global pandemic. The US ban on travellers from Europe, excluding the UK, also refuelled the fears of coronavirus pandemic on businesses around the world.

The logo of the World Health Organization (WHO)
The logo of the World Health Organization (WHO)FABRICE COFFRINI/AFP/Getty Images

On Thursday, the US S&P 500 futures slipped as much as 4.9 per cent, a day after losing 4.89 per cent, putting the index in a bear market territory for the first time since the 2008 global economic crisis. The Euro Stoxx 50 futures also sank 5.8 per cent to their lowest levels since 2016.

The bear run on the global markets came after US President Donald Trump announced a ban on travellers from 26 European countries entering the United States for 30 days, starting Friday, in order to contain the rapidly spreading outbreak.