Markets trading halted for 45 minutes as Sensex hits lower circuit

Indian equity benchmarks resumed sell-off on Monday with gap-down opening, in line with their Asian peers, as the governments of world struggled to contain the fast spreading novel coronavirus (COVID-19). In India, various state governments announced lockdown in nearly 80 districts across the country as the total number of confirmed Covid-19 cases inched towards 400. Also, three more coronavirus deaths were reported from Mumbai, Bihar and Gujarat. This takes the total number of deaths in India to seven.

Markets trading have been halted for 45 minutes as Sensex hit lower circuit with losses of 10% in the first hour of session. There was cautiousness with report that the large amount of selling by foreign institutional investors for nearly a month due to recession fears after rapid wide-spreading novel coronavirus in Europe and United States was one of the biggest reasons for equity market correction. FIIs net sold Rs 20,908 crore worth of shares in the week ended March 20, taking the total to Rs 51,243 crore in March so far.

On the global front, most of the Asian markets are trading lower amid growing worries about the impact of the coronavirus pandemic on the global economy. More countries and regions are resorting to shutdowns and border closures to prevent the spread of COVID-19, raising concerns about their impact on economic activity. The coronavirus pandemic continues to spread rapidly across the world. According to data from the World Health Organization, the number of people infected with the coronavirus is now more than 294,000, while 12,900 people have died due to the pandemic.

Back home, the insurance stocks were in focus with the Insurance Regulatory and Development Authority of India (Irdai) data showing that non-life insurance firms reported a 14% increase in the premium collection to Rs 1.73 trillion during April-February this financial year. In stock specific development, Maruti Suzuki India slumped over 10 percent after announcing plant closure due to the coronavirus outbreak. Bajaj Auto, Hero MotoCorp, Mahindra & Mahindra and Tata Motors plunged 8-10 percent.

The BSE Sensex hits lower circuit at 26924.11, down by 2991.85 points or 10.00% after trading in a range of 26924.11 and 27900.83. All the 30 stocks were declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 8.81%, while Small cap index was down by 8.90%.

The losing sectoral indices on the BSE were Bankex down by 13.01%, Realty down by 11.05%, Energy down by 10.57%, Auto down by 10.27%, Basic Materials down by 9.92%, while there were no gainers on the BSE sectoral front.

The top losers on the Sensex were Axis Bank down by 19.98%, ICICI Bank down by 15.00%, Indusind Bank down by 14.99%, Bajaj Finance down by 14.23% and Hero MotoCorp down by 13.90%.

Meanwhile, in order to maintain financial stability in the system in the wake of the coronavirus outbreak, the Reserve Bank of India (RBI) has decided to inject liquidity of Rs 30,000 crore via purchase of government securities under open market operations (OMOs) in two tranches of Rs 15,000 crore each in March. The auctions would be conducted on March 24 and March 30.

It said with the COVID-19 related dislocations, stress in certain financial market segments is still severe and financial conditions remain tight. The RBI's endeavour is to ensure that all markets segments function normally with adequate liquidity and turnover.

The central bank will purchase securities with a coupon rate of 6.84 per cent (maturity December 19, 2022); 7.72 per cent (May 25, 2025); 8.33 per cent (July 9, 2026) and 7.26 per cent (January 14, 2029). It said there is no notified amount against any of these securities within the aggregate ceiling of Rs 15,000 crore set for the operation.

The RBI reserves the right to decide on the quantum of purchase of individual securities, accept offers for less than or higher than the aggregate amount of Rs 15,000 crore (including due to rounding off) and also to accept or reject any or all the offers either wholly or partially without assigning any reason.

The CNX Nifty is currently trading at 7903.00, down by 842.45 points or 9.63% after trading in a range of 7892.30 and 8159.25. All the 50 stocks were declining on the index.

The top losers on Nifty were Axis Bank down by 19.99%, ICICI Bank down by 15.00%, Indusind Bank down by 15.00%, Adani Ports & SEZ down by 15.00% and Hero MotoCorp down by 14.30%.

Asian markets were trading mostly lower; Straits Times declined 176.77 points or 7.33% to 2,233.97, Hang Seng fall 855.77 points or 3.75% to 21,949.30, Taiwan Weighted tumbled 227.23 points or 2.46% to 9,006.86, KOSPI weakened 58.39 points or 3.73% to 1,507.76, Jakarta Composite decreased 156.30 points or 3.73% to 4,038.64 and Shanghai Composite slipped 43.89 points or 1.60% to 2,701.73, while Nikkei 225 rose 295.35 points or 1.78% to 16,848.18.