Mayhem continued on Dalaal Street on Wednesday too as benchmark indices tanked to a three-year low, following a global sell-off. The Sensex at Bombay Stock exchange (BSE) plunged below 29,000 level and Nifty breached its Friday's panic low of 8,555, indicating that selling pressure is expected to remain for a while. Sensex tanked 1,709 points to 28,869, while the Nifty dropped 498 points to close at 8,468. Notably, in contrast, the Sensex opened with 500 up but as the day progressed under heavy profit booking, the markets eventually dropped around 1700 points.
Huge selling across sectors
Selling pressure was witnessed across sectors including telecom, finance, banks, power, realty, auto, and capital goods index. The pressure was so huge that all the sectoral indices closed in red at the closing of the trading session. Mid and small caps took the beating with BSE Midcap index plunging around 4.8 percent, while the S&P BSE Small cap index tanking 6.09 percent. Interestingly, in last 41 sessions, massive sell-off has taken place where Nifty has fallen from 12,430.50 to 8,541.50, a fall of 3,947 points. Nifty bank fell off the cliff to end at a three-year low and the Midcap index plunged to its lowest level in four years.
Multiple factors led by Coronavirus fear dragged the stocks
The disruption across the sectors due to Coronavirus has now started to hit the economies the hard. In India also the number of cases has jumped over 150 (152 at the time of filing this copy). The fear of recession has continued to affect the markets across the world. Further, the Supreme Court today rapped the government on self-assessment pertaining to AGR dues with its permission calling it a contempt of court.
But some experts have argued that the markets are overreacting to Coronavirus fears. "The markets are overreacting to this whole concern about the financial sector and about coronavirus. This is a passing phase and honestly, in my view, this offers a good opportunity for people to look at making investments with a long term view," the Economic Times quoted Keki Mistry, CEO, HDFC Bank as saying.