Indian stocks plummeted to record their worst week since the 2008 financial crisis as more indications poured in that the coronavirus outbreak could turn into a pandemic, threatening to spread contagion across the world economy, roiling global trade and leaving few industries and countries unscathed.
The NSE Nifty 50 index ended 3.71% lower at 11,219.20, and the benchmark S&P BSE Sensex fell 3.4% to close at 38,383.32 on Friday — the sixth consecutive session of losses — as analysts also predicted lower earnings for companies in the March quarter.
For the week, the Nifty 50 index shed 7.3%, while the Sensex dropped 6.8%.
The fall was in line with global stock markets. American, European and key Asian markets fell sharply on Thursday and Friday — with some of the worst losses seen in metal stocks. Cumulatively, Reuters reported, a value of $5 trillion was wiped out from the rout reported overnight in American stocks and across Asian and European equities on Friday.
All told, investors in Indian markets have lost Rs 10.67 lakh crore (trillion) since the beginning of the week. On Friday alone, they lost overRs 5 lakh crore.
On Thursday, the S&P500 fell 4.43%, the Dow Industrial Average 4.42%, and the Nasdaq Composite 4.61%. Germany’s DAX skidded as much as 5% before stabilising.
On Friday, Tokyo and Shanghai closed 3.7% lower, while the S&P, Dow and Nasdaq opened up to 2% lower.
Not too long ago, investors were growing confident the disease, which emerged in China in December, might be under control, but outbreaks in Italy, South Korea, Japan and Iran have fuelled fears the virus is turning into a global threat.
Union finance minister Nirmala Sitharaman, while speaking at an event organised by CNBC TV18, said “there is no need to panic” about the coronavirus outbreak.
Friday’s carnage in Indian markets wiped out investor wealth worth Rs 5,46,287.76 crore. In terms of a single-day drop, this was the worst since August 24, 2015.
The ‘Fear Index’ or India ‘VIX’ logged one of the steepest single day jump in recent past closing at a record of 22.87.
“There are concerns that the outbreak will adversely impact… global supply chains big time, thereby affecting economic growth of most nations,” Ajit Mishra, vice president of research at Religare Broking, said in a note, news agency Reuters reported.
Even sectors like information technology tumbled despite a weaker rupee, indicating increasing anxiety among investors, the agency quoted Mishra as saying.
Brent crude oil futures dropped 3.38% to $49.98 per barrel. On the currency front, the Indian rupee tumbled 55 paise to 72.16 per US dollar (intra-day).
Till Thursday, the number of people who were infected by the pathogen, technically called the SARS-Cov2, and had developed the pneumonia-like disease called Covid-19, closed in to the 84,000 mark while deaths neared 2,900.
While a large chunk of these numbers were reported from China, the outbreak is now surging elsewhere.
Four more countries reported their first cases on Thursday, taking the number of countries and territories outside China with infections to 55, with more than 4,200 cases killing about 70 people.
The first detailed joint assessment by the World Health Organization (WHO) and Chinese authorities warned that the rest of the world may not be able to stem the spread of the virus in a way China had. “Much of the global community is not yet ready, in mindset and materially, to implement the measures that have been employed to contain Covid-19 in China,” said the report.
“Fundamental to these measures is extremely proactive surveillance to immediately detect cases, very rapid diagnosis and immediate case isolation, rigorous tracking and quarantine of close contacts, and an exceptionally high degree of population understanding and acceptance of these measures,” it added.
Late on Thursday, WHO director general Tedros Adhanom Ghebreyesus said nations should prepare. “This virus has pandemic potential,” he said, adding: “This is not a time for fear. This is a time for taking action to prevent infection and save lives now.”
As hopes that the outbreak would be contained to China vanished, countries started stockpiling medical equipment.
On Thursday, Germany quarantined about 1,000 people and Switzerland banned big events, leading to the Geneva car show being cancelled. Iran reported 143 more coronavirus infections, while South Korea revealed 571 new cases. Nigeria, Africa’s most populous country, confirmed the first infection south of the Sahara desert.
