Business / Sensex falls 450 points, rupee slips against US dollar ahead of Trump's visit

Benchmark equity indices BSE Sensex and NSE Nifty cracked over 1 per cent in Monday’s early trade on growing concerns over the global spread of the deadly coronavirus.

The 30-share index was down 472.18 points, or 1.15 per cent, at 40,697.94 at around 9.30 am (IST), while the 50-share Nifty index was down 145.80 points, or 1.21 per cent, at 11,935.05 at around the same time.

During the weekend, South Korea put the country on high alert while the number of infections jumped to over 700 and deaths rose to seven. In Italy, officials said a third person infected with the flu-like virus had died, while the number of cases jumped to above 150 from just three before Friday.

Whereas in China, the virus has killed over 2,400 and reported 76,936 cases, and slammed the brakes on the world’s second-largest economy.

Factors behind market crash:

Weak global cues

Asian peers including Hang Seng Nikkei and Shanghai plunged over 1.50 per cent as investors fret over the spread of the deadly coronavirus around the world.

Safe haven buying

Money is flowing from risky assets to safe haven assets like gold and dollar. In the international market, gold prices jumped over 2 per cent to their highest since February 2013, as a spike in coronavirus cases in several countries outside China heightened worries about a hit to global economic growth, prompting a flight to safe havens. Gold traded 0.80 per cent higher at Rs 43010 per 10 gram in the domestic market.

GDP data

Market participants will also be looking forward to the Gross Domestic data for the third quarter of current fiscal year (FY20) to be out later in the week. According to tank National Council of Applied Economic Research (NCAER) India's economic growth for the current fiscal is likely to come in at 4.9%, a tad down from 5% estimated by the National Statistical Office (NSO).

Weakness in metal counters

Shares of metal companies slipped up to 6 per cent as rising inventories in select commodities stoked fears of oversupply and investors are also worried over the rapid spread of COVID-19 in several countries outside China. Each component of the BSE Metal index was in the red with Hindalco falling the most at 5.66 per cent. Jindal Steel, Tata Steel, JSW Steel, Vedanta, SAIL, Nalco, Coal India, Hindustan Zinc and NMDC were down between 0.90 per cent and 5 per cent.

Market at a glance:

As many as 25 stocks in the Sensex pack traded in the red with Tata Steel falling the most, down 4.19 per cent. It was followed by ICICI Bank (down 2.41 per cent), HDFC (down 2.40 per cent), NTPC (down 2.29 per cent) and Axis Bank (down 2.08 per cent).

On the other hand, IT majors including Infosys, Tech Mahindra and Tata Consultancy Services gained up to 1.25 per cent following weakness in the domestic currency.

Barring the BSE IT (up 0.64 per cent) and TECk (up 0.37 per cent), other sectoral indices on BSE traded lower. The metal index plunged 3.48 per cent in early trade, while power (down 1.71 per cent), auto (down 1.57 per cent) and healthcare (down 1.30 per cent) stood among other top losers on the exchange.