Why Stock Markets Lost Rs 7 Lakh Crores Today?

Equity benchmark Sensex plummeted 1,407 points on Monday as panic over a new strain of coronavirus in the UK led to a massive selloff in global equities. The Markets lost Rs 7 lakh crores in Market Capitalization today.

Covid strain does the damage

Concerns of new COVID-19 strain in the UK and emerging doubts over efficacy of COVID-19 vaccination dented investors' sentiments globally. Domestic bourses were among the worst performers as profit-booking also took place at higher levels.

India also banned all flights to and from the United Kingdom from 23:59 hours on December 22. This comes hours after Hong Kong made a similar announcement, becoming the first city in Asia to announce such a halt after a new super-virulent strain of the virus.

Several European countries, including France, Germany, the Netherlands, Belgium, Austria and Italy, have banned flights from the UK with the British government warning that the potent new strain of the virus was "out of control". The UK has imposed a stringent new stay-at-home lockdown from Sunday in London and other regions. India too has suspended all flights from the UK between December 23-31.

The 30-share benchmark index ended at 45553.96 down by -1406.73 points or by -3 % and then NSE Nifty was at 13328.4 down by -432.15 points or by -3.14 %.

Sensex touched intraday high of 47055.69 and intraday low of 44923.08 The NSE Nifty touched intraday high of 13777.5 and intraday low of 13131.45

The top losers of the BSE Sensex pack were Oil And Natural Gas Corporation Ltd. (Rs. 89.90,-9.15%), IndusInd Bank Ltd. (Rs. 841.85,-6.98%), Mahindra & Mahindra Ltd. (Rs. 686.20,-6.26%), State Bank of India (Rs. 254.60,-6.19%), NTPC Ltd. (Rs. 97.50,-5.98%), among others.

IT index was at 16465.01 up by 84.67 points or by 0.52%. Brightcom Group Ltd. (Rs. 5.82,+7.58%), Persistent Systems Ltd. (Rs. 1335.00,+2.71%), MphasiS Ltd. (Rs. 1390.60,+1.49%), Larsen & Toubro Infotech Ltd. (Rs. 3375.00,+0.70%), Cerebra Integrated Technologies Ltd. (Rs. 32.25,+0.62%),.

PSU index was at 5491.3 down by -379.71 points or by -6.47%. Chennai Petroleum Corporation Ltd. (Rs. 93.85,-13.94%), Indian Bank (Rs. 78.40,-10.30%), National Aluminium Company Ltd. (Rs. 39.20,-10.30%), Canara Bank (Rs. 109.25,-10.23%), Hindustan Copper Ltd. (Rs. 57.50,-9.95%),.

The Market breadth, indicating the overall strength of the market, was weak. On BSE out of total shares traded 3496, shares advanced were 742 while 2561 shares declined and 193 were unchanged.

Meanwhile, European markets including the German DAX, French CAC and the UK's FTSE were trading with cuts of nearly 3 per cent each.