Blood bath in Indian equity market continues as Sensex tanked 1,941 points, Nifty 50 fell as much as 4.9 % to trade at 10,451.45 on Monday, 9th March 2020. This is the worst fall in the last five years since 24 August 2015. This is difficult times for the Indian market as restraining factors continue to impact the Indian economy.
Various factors such as global slowdown, Corona outbreak, Yes Bank turmoil had crippled the positive sentiments of the Indian economy. Additionally, the sliding Indian rupee against USD is adding insult to injury; INR recently breached 74 levels against the US dollar. The Reserve Bank of India took control of capital-starved Yes Bank and asked SBI to take a 49% stake in Yes Bank as a preventive measure.
The revival of Yes Bank looks challenging yet a sigh of relief for the shareholders and account holders. Series of setbacks from the Corona outbreak and gloomy Indian economy creates an atmosphere of fear and distress.
The global economy is witnessing a difficult phase that led the oversold of equity shares, however, Indian markets too have fallen considerably owing to serious of hit backs. Corona outbreak shook the global economy as the virus reached over 70 countries with over 110,000 confirmed cases resulting in nearly 4,000 fatalities around the globe.
The Chinese economy is predicted to fall around 4% this quarter which will impact other economies too. Ban on travel and import/export for an indefinite time due to Corona outbreak leaves the global market in the lurch.
Sensex was under strong selling pressure today, falling over 2,000 points, with banking stocks particularly under pressure. The timing of the Corona outbreak around the globe is worrisome since negative sentiments are creating panic in the stock market. The weakening of Indian Rupee against the US dollar makes investors wary and keep investors away from fresh buying. Some experts believe that weaker rupee will push up the borrowing costs and the weaker rupee will push investors towards gold.
We expect the sluggish bear trend will continue and the Indian market will remain under pressure in the near-term since the sentiments are weak with no relief anytime soon. Investors will continue to monitor crude oil prices since drastic fluctuation in the crude index will keep global markets on edge.
The Russia-Saudi clash over oil has already fueled concerns about an outright price war in crude oil prices as each nation tries to gain its market share. The cut-throat competition will everyone on hooks until the Russia-Saudi government come to a consensus. Drastic fall in oil consumption due to corona outbreak, higher US crude production and no sign of settlement over price war will result in a sell-off in crude oil price.
