Sensex plunges 10 pc, trading halts for 45 minutes on coronavirus-led fears
Equity benchmark Sensex sank nearly 3,000 points to hit its lower circuit limit in the morning session on Monday, triggering a 45-minute trading freeze as coronavirus-led lockdowns across the world stoked fears of a massive global recession.
After opening 2,718 points lower, the BSE barometer plunged 2,991.85 points, or 10 percent, to 26,924.11.
Similarly, the NSE Nifty fell 842.45 points, or 9.63 percent, to 7,903.
As an automatic mechanism to freefall in the market, when an exchange plunges 10 percent before 1 pm, trading is halted on stock exchanges for 45 minutes.
All Sensex components were trading in the red, with Axis Bank tanking up to 20 percent, followed by ICICI Bank, IndusInd Bank, Bajaj Finance, Hero MotoCorp, and M&M.
According to traders, extreme lockdown measures taken by governments, in India and the world over, had put immense pressure on investor sentiment.
As coronavirus cases climbed, central and state governments in India decided to lock down 75 districts from where COVID-19 cases have been reported to break the chain of transmission. The Health Ministry said states would earmark hospitals to exclusively treat coronavirus patients.
Putting in place a tighter framework to curb high market volatility, Securities and Exchange Board of India (Sebi) on Friday announced revising the market-wide position limit for stocks in the derivatives segment, flexing dynamic price bands and other measures for one month starting from March 23.
These steps would limit short selling of shares and reduce volatility in individual stocks.
Stock exchanges and regulatory officials, however, dismissed suggestions about curtailment of trading hours in wake of the pandemic.
Bourses in Shanghai, Hong Kong and Seoul plunged up to 4 percent, while Tokyo was trading with gains.
The rupee, too, plunged 92 paise against US dollar to 76.12. Meanwhile, Brent crude oil futures fell 3 percent to $26.17 per barrel.
The number of global COVID-19 infections has shot past 3,00,000. Worldwide fatalities topped 14,000. Cases in India rose to 390 over the weekend, according to the Health Ministry.
(Edited by Teja Lele Desai)