The Indian Equity indices witnessed the biggest-ever plunge in decades on Thursday with the benchmark falling over 2,900 points. The Sensex with 2,919 points or 8.18 percent loss closed with 32,778 while NSE NIFTY drops 868 points or 8.30 percent to close at 9,590. This biggest drop in history wiped out Rs 11.27 lakh crore of equity investors.
Reasons for the drop:
The WHO has declared coronavirus outbreak a pandemic. The coronavirus has spread over 114 countries around the world with cases more than 1,24,000, and over 4,500 deaths.
A pandemic is a disease that has spread in multiple countries around the world, usually affecting a large number of people so does the market. This has made the stock market enter in bear territory.
A temporary travel ban from Europe, except the UK, to curb the spread of the coronavirus by US President Donald Trump also crumbled global shares, threatening more disturbance to businesses and the world economy. India has also suspended all visas, except for a few such as diplomatic and employment, till April 15.
Foreign institutional investors (FIIs)
Foreign institutional investors (FIIs) have continued selling Indian stocks with a net Rs 20,831 crore that has withdrawn from domestic markets.
RBI of India has planned a draft for restructuring YES Bank. They have been proposed to write down additional tier (AT1) bonds, this has created panic among mutual fund investors. “India’s financial system has seen some series of crises starting with PNB and then DHFL, IL&FS and PMC Bank. Now with the full-blown crisis in YES Bank, the situation has become grave,” said VK Vijaykumar, Chief Investment Strategist at Geojit Financial Services.
A large number of selloffs in the markets have plunged the global market.
- Asia-Pacific shares in Japan fell 3.2%
- Japan’s Nikkei fell 5.3%
- Dows Jones industry fell 5.86%
- S&P dropped 4.89%
- Nasdaq composite falls 4.7%
- Euro Stoxx 50 Futures of Europe touched downfall of 8.3%
- Australian shares plunged 7.4%
Indian rupee reached 74.50 against the US dollar with a downfall of 82 paise.