Stock markets tank over Yes Bank crisis and Coronavirus fears

The BSE Sensex crashed 894 points or 2.32 per cent on Friday (March 6) as regulatory curbs on cash-strapped Yes Bank triggered a crisis of confidence among investors and a heavy sell-off in the global markets on coronavirus concerns took a further toll on risks sentiment.

The NSE Nifty too saw a plunge of 279 points and closed at 10,989 points on last trading day of the week.

The 30-share BSE Sensex, which closed at 38,470 point on Thursday, opened at 37,613 on Friday with 857 points drop in the morning itself. It further plunged 1,459 points to 37,011 in the early hours of the trading day. However, it recovered in the latter half of the day to close at 37,572 points.

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Likewise, the broader NSE Nifty tanked 279.55 points or 2.48 per cent to close at 10,989.45.

The fall was triggered by two major factors — the Yes Bank crisis and the fall of Asian markets over concerns regarding the coronavirus outbreak.

The banking index was badly hurt due to a crash in the stock price of Yes Bank on Friday. The stock price of the Yes Bank dropped to almost half than that of the previous day’s close as it tanked from ₹36.80 on Thursday to ₹16.60 on Friday.

Related news: SBI has expressed interest in investing in crisis-hit Yes Bank: RBI

The decline in Asian markets over the fear of coronavirus and its potential impact on global economies reflected in Indian markets too.

Japanese stock index Nikkei fell 2.9 per cent while Chinese and Hong Kong markets too saw a declining trend. Hang Send (Hong Kong) fell by 2.15 per cent while Shanghai Composite saw a dip of 1 per cent in the morning.

Though RBI superseded Yes Bank’s board of directors, it could not really gain the confidence of the investors. While explaining the move, the RBI said in an official statement, “This has been done to quickly restore depositors’ confidence in the bank, including by putting in place a scheme for reconstruction or amalgamation.”