While the signs were obvious with the SGX Nifty dropping over 1%, benchmark indices of India saw a bloodbath pushed by US Dow which cracked a huge 4% or over 1000 points in overnight trade. European stocks also cracked heavily. Here are some of the reasons which drove the index to shed heavily, Nifty last was trading lower by 322 points or 2.77 at 11,311 while the Sensex gained some ground and was trading lower by 1080 points or 2.72% at 38664.
5 Major Pull-backs for the Indices:
1. Coronavirus infection spreading world over:
While the number of new cases reported in China sank to its lowest in a month, its spread is increasing outside China. New Zealand has reported its first case of coronavirus outbreak and with India that is densely population, the country shall also have a rub off effect. Also, there has been suggested to US national that should prepare for the outbreak which saw its infections rising in Iran, South Korea etc.
2. Disappointing GDP data in sight:
There are signs of recovery with the demand for power increasing for the first time in six months, for the quarter ended December economic growth of the country measured by GDP is said to be maintained at 4.5% quarter on quarter.
3. Global economic growth to suffer:
The huge decline in today's session on the benchmark indices point to a tumultuous worldwide global rout and on the back of it several global firms have lowered their GDP forecast for different nations. There is feared recession in some of the economies including the US if the current threat does not subsides.
4. Global markets witness to worst decline since 2008:
The outbreak is suggested to disrupt supply chains as well as travel and tourism and amid it global stocks are witness to worst weekly decline since 2008 when the world economy witnessed Lehman crisis.
5. FIIs continue to sell:
The foreign institutional investors continue to sell in the Indian markets. And in the ongoing week have pulled close to Rs. 10000 from Indian equities.