Indian markets close 4% up, hours after crash due to coronavirus panic forces trading halt
Yes Bank was the top stock on both the Sensex and the Nifty.
Indian share markets staged a sharp recovery on Friday after being forced to halt trading for 45 minutes for the first time since 2009 very early in the day, Reuters reported. Continuing panic over the spreading coronavirus pandemic triggered a 10% crash just a few minutes into Friday’s session. When trading resumed, both benchmark indices were at their most volatile in a decade – but erased all losses within hours.
By the end of the trading day, both Sensex and Nifty 50 had each gained around 4%. The BSE Sensex closed 1,325.34 points up at 34,103.48, and the National Stock Exchange Nifty 50 gained 365.05 points to finish at 9,955.20.
But Sujan Hajra, chief economist at Anand Rathi Securities, told Reuters that the rebound in the markets did not indicate positive sentiment. He said markets are very volatile. “Markets are acknowledging that they are in the oversold zone so there is some buying support coming in,” he said.
The freefall in the stock markets – both Indian and global – had continued in the early morning due to economic uncertainty across the world caused because of the coronavirus. A 10% crash before 1 pm on a trading day triggers a 45-minute halt in trading, called a “circuit breaker”.
The Indian equity indices opened at a three-year low. The Sensex plunged as much as 2,522.05 points to hit 31,996.04 after the first few minutes of trade. The Nifty 50 started the session at 9,107.60 but soon dropped to 8,830.90. At 9.32 am, the Sensex was trading 3,090.62 points lower at 29,687.52 while the Nifty 50 was down by 966.10 points at 8,624.05. On Thursday, the bourses had experienced their worst day ever.
The top gainers on the Sensex on Friday were State Bank of India, Tata Steel, HDFC, Sun Pharmaceuticals and Bajaj Finance. The biggest gainers on the Nifty were SBI, Tata Steel, HDFC, Bharat Petroleum Corporation Limited and Sun Pharmaceuticals.
The only stocks which declined on the Sensex were Nestle, Asian Paints, Hindustan Unilever, Hero Motocorp and HCL Technologies. The five biggest losers on the Nifty were UPL, Zee Entertainment, Nestle, Asian Paints and Britannia.
Apart from the Sensex, Australia ASX All Ordinaries was the only major Asian market to close higher. The market closed 219.80 points, or 4.09% higher. Tokyo’s benchmark Nikkei index nosedived 7.12% soon after opening, and closed 6.08% lower. Trading was temporarily suspended on South Korea’s stock exchange when the benchmark KOSPI index fell 6.8%. The Dow Jones lost 10% and dropped to 21,200.62 in its worst session since 1987. London and Frankfurt also had their worst days in decades.
“The turmoil in markets has moved up another notch over the past 24 hours with President Trump’s European travel ban and underwhelming stimulatory measures adding more fuel to the fire of uncertainty, instead of providing a dose of reassurance,” said National Australia Bank’s senior FX strategist Rodrigo Catril, according to Hindustan Times. “New containment measures to slow the spread of COVID-19 have increased the prospect of a severe global economic growth downturn.”
The Indian rupee closed 48 paise higher at 73.80 against the United States dollar, after reaching its lowest ever level in early trade.