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Nifty, Sensex trading halted for 45 minutes, indices hit 10% lower circuit limits

After resuming trade, BSE benchmarks Sensex and Nifty recovered smartly.

ETMarkets.com|
Last Updated: Mar 13, 2020, 10.56 AM IST
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Jefferies in its Greed & Fear report hoped that a full-scale recession can be avoided if the coronavirus turns out to be seasonal.
NEW DELHI: Investors pressed panic button on ‘Friday the 13th,’ as fears of a global recession knocked 10 per cent off US stocks overnight in their worst-ever fall since Black Monday (October 19, 1987).

The NSE Nifty50 hit its lower circuit at 8,624.05, down 966.10 points or 10.07 per cent. The BSE Sensex also hit its 10 per cent lower circuit limit at 29,687.52 after falling 3,090.62 points, or 9.43 per cent. The trading has been halted for 45 minutes.

The pre-open will now take place at 10.05 am. The trading will resume at 10.20 am.

For Sensex, the next circuit (15 per cent) will be at 27,861 level. The next circuit limit for Nifty will be at 8,152.

If any circuit is triggered before 1 pm now, the trading will be halted for 1.45 pm. In case the trading is halted between 1 pm and 2 pm, the trading will be halted for 45 minutes. Any post 2 pm circuit will mean, the trading will be shut for the day.

“In such wild swings, it’s difficult to mention any levels, especially the support levels that are being broken with ease,” said Sameet Chavan of Angel Broking.

Fear guage VIX stood at 41.16, with investors losing 12.21 crore worth of money within first 15 minutes.

Not only India, markets in Indonesia and Thailand, South Korea and Philippines also hit their lower circuit limits.

It is felt that any stimulus by governments globally, fiscal or monetary, would prove little to offset the impact of pandemic coronavirus, which is now fast-gripping many developed economies of the West.

For India, where flows into equity mutual funds climbed to a 11-month high of over Rs 10,000 crore in February, the recent foreign outflows are threatening. They now stood at nearly Rs 33,000 crore after 12 sessions of continuous selloff.

Among Sensex stocks, HCL Tech plunged 15.60 per cent to Rs 416. Tech Mahindra plummeted 15 per cent to Rs 552.35. Kotak Mahindra Bank, TCS, and IndusInd Bank declined 14-15 per cent. Axis Bank, NTPC and maruti Suzuki fell 13-15 per cent.

Jefferies in its Greed & Fear report hoped that a full-scale recession can be avoided if the coronavirus turns out to be seasonal.

“But, in the interim, a lot of damage can be done in markets, and to economic activity, on a three-month view if the virus follows the same trajectory of infections as has been seen elsewhere when policymakers react too late. On this point, the policy response in Washington is also not being helped by the continuing contentious political divide in Congress in a presidential election year,” it noted.

Till Thursday, the Nifty50 was down 23 per cent from its all-time high of 12,430 hit on January 20, 2020. AK Prabhakar of IDBI Capital expects the ongoing slide in stocks to extend to 35 per cent. This estimate pegs Nifty bottom at 8,100.

The Bloomberg’s propriety Fear and Greed indicator — a gauge of buying strength to the selling strength — of the Nifty 50 index is showing a negative reading of 1,813.

This reading is worse than negative 1,445 during the global financial crisis in January 2008.

“Going ahead, the market direction will continue to be dictated by the updates of coronavirus and we will have a wait and watch approach for the tide to settle before re-entering the market,” Chavan said.
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