Indian stocks extend fall as coronavirus threatens fragile economy
The S&P BSE Sensex fell 7.3% to 31,612.73 as of 2:18 p.m. in Mumbai, with all 30 members declining, following a wild session on Friday, when the gauge swung to end 4% higher from a 10% slide that triggered a market-wide circuit breaker.
India’s benchmark stock index slumped on Monday after entering into a bear market last week amid concern that the novel coronavirus outbreak can threaten the nation’s already fragile economy.
The S&P BSE Sensex fell 7.3% to 31,612.73 as of 2:18 p.m. in Mumbai, with all 30 members declining, following a wild session on Friday, when the gauge swung to end 4% higher from a 10% slide that triggered a market-wide circuit breaker. The Nifty Index fell 7.1% today.
India NSE Volatility Index, the stock market’s fear gauge, is hovering around levels not seen since 2008, signaling market turbulence will likely persist. Policy makers have pledged to use their record $481 billion foreign-currency arsenal in a bid to stem the market rout, while the economy is expanding at its slowest pace in 11 years.
Strategist Views
India stocks are “still far from a point where one can call a market bottom, particularly as uncertainties due to virus, financial market dysfunction and energy prices remain,” Credit Suisse Group AG’s equity strategists including Neelkanth Mishra wrote in a note. “We are still not at a level that suggests the aggressive selling is done,” the note added.
The trajectory of the Covid-19 outbreak remains difficult to chart and incorporate in earnings, Citigroup Inc.’s analysts Surendra Goyal and Vijit Jain wrote in a note.
