The Indices in early trade on February 26, 2020 started with a gap down as suggested from the SGX Nifty. There is a global sell-off triggered due to coronavirus pandemic. In the US, Dow lost a tremendous 3% where it cautioned its citizens to prepare for the disease. In the intra-day, while Sensex breached 40,000 levels, it is now off day's low with 80 points loss on the Sensex at 40,000 while Nifty is also down some 25 points at 11772.
Here are listed down reasons dragging the indices:
Metal and auto stocks dragging the indices:
These two sectors have been dragging the benchmark indices lower with Nifty auto going down by as much as 1.8% while Nifty metal too saw a decline to the tune of 1.6%
Broader markets also fell:
There has been across the markets sell-off and besides all the sectoral indices that are trading in the red, broader markets also see a decline with mid-cap and small-index declining up to 1%.
Coronavirus impact sustains:
The effect due to coronavirus scare which has now spread beyond China is not fading. In fact as the death toll and infection on account of the virus is fast spreading there remains concerns around global economic recovery amid this novel threat. Further as per Moody's Analytics there has been raised a statement that if coronavirus spread turns into a pandemic then global recession is likely.
As per reports the outbreak has now reached as many as 30 nations and amid its spread in Italy, Iran and South Korea, the US has also warned citizens of its likely outbreak in their nations too.
Volatility ahead of February 28 F&O expiry:
As there shall roll over in the F&O segment to March series, markets are expected to remain highly volatile.
Weak global markets:
Other than the Asian markets, the US markets also were spooked to a great extent. Also share in China were dragged lower by as much as 1.3%. Also, there was a sudden spike in coronavirus infections in South Korea which led its indices to hit a 2-month low.