India Equity Sell Off Resumes as Virus Threatens Fragile Economy
India’s benchmark stock index slumped on Monday after entering into a bear market last week amid concern that the novel coronavirus outbreak can threaten the nation’s already fragile economy.
The S&P BSE Sensex fell 5.3% to 32,304.99 as of 9:23 a.m. in Mumbai, with all 30 members declining, following a wild session on Friday, when the gauge swung to end 4% higher from a 10% slide that triggered a market-wide circuit breaker. The Nifty Index fell 5.2% today.
India NSE Volatility Index, the stock market’s fear gauge, has risen to levels not seen since 2009, signaling market turbulence will likely persist. Policy makers have pledged to use their record $481 billion foreign-currency arsenal in a bid to stem the market rout, while the economy is expanding at its slowest pace in 11 years.
India stocks are “still far from a point where one can call a market bottom, particularly as uncertainties due to virus, financial market dysfunction and energy prices remain,” Credit Suisse Group AG’s equity strategists including Neelkanth Mishra wrote in a note. “We are still not at a level that suggests the aggressive selling is done,” the note added.
The trajectory of the Covid-19 outbreak remains difficult to chart and incorporate in earnings, Citigroup Inc.’s analysts Surendra Goyal and Vijit Jain wrote in a note.
- All 19 sector indexes compiled by BSE Ltd. slid, led by a gauge of financial companies.
- IndusInd Bank Ltd. and Tata Steel Ltd. were among the top losers on the benchmark index.
- India’s SEBI Mulls Short Selling, Trading Curbs: Bus. Standard
- RBI to Use India Reserves Amid Rout as Modi Mulls Spending
- Yes Bank Collapse May Extend India Lender Financing Slump
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