The Sensex and the Nifty saw massive fall with selling across the board, as deaths across South Korea and Italy following coronavirus infections roiled global markets. The US Dow Jones Futures pointed to a 770 point fall, while the German DAX was down more than 4 per cent in trade.
On Sunday, Seoul raised its coronavirus alert to the "highest level," with the latest spike in numbers bringing the total infected to more than 750. This would mean that the country now has the largest number of cases outside mainland China.
The Sensex closed the day lower by a shopping 806 points, its biggest fall since Budget day. Almost Rs 3 lakh crores of investor wealth was destroyed in trade.
The worries were simple that in many countries there could be an industrial lockdown as the contagian due to the virus spreads. This could result in a trade impact leading to an economic slowdown.
Stocks that were immediately impacted were the metal stocks, with JSW Steel plunging as much as 8 per cent in trade, followed by Tata Steel, Hindalco and other metal stocks. IT stocks which were resilient in trade, managed to buck the trend, but, soon gave up gains. Among the stocks that gained in trade were Tube Investments, GMR Infra and Jyothy Labs. It's likely that there maybe some more volatility in the day's to come.
However, markets have been seeing such falls, followed by a solid rally, thanks to global liquidity. It would not be a surprise to see a sharp bounceback in the Sensex towards the later part of the week.