Equity indices crumbled during early hours on Friday (February 28) as global share prices headed for the worst week since the world financial crisis in 2008 and investors readied for the coronavirus to become a pandemic.
Market benchmark Sensex plummeted over 1,100 points, wiping off over ₹5 lakh crore investor wealth, in the opening session amid a massive selloff in global equities as rising coronavirus cases outside China stoked fears of a pandemic that could dent world growth.
The 30-share index sank 1,100.27 points, or 2.77 per cent, to 38,645.39, while the NSE Nifty cracked 329.50 points, or 2.83 per cent, to 11,303.80.
All Sensex components were trading in the red, led by losses in Tata Steel, Tech Mahindra, Infosys, Mahindra and Mahindra, Bajaj Finance, HCL Tech and Reliance Industries.
In the previous session, the Sensex settled 143.30 points, or 0.36 per cent, lower at 39,745.66, and the Nifty fell 45.20 points or 0.39 per cent to end at 11,633.30.
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According to analysts, till last week the market was of the view that coronavirus was going to have a minimum impact on the global economy as the situation in China was being contained. But the increase in the number of new cases is changing the view and investors are worried about an intense slowdown.
Further, incessant selling by foreign investors is also spooking domestic market participants, traders said.
On a net basis, foreign institutional investors sold equities worth ₹3,127.36 crore on Thursday, data available with stock exchanges showed.
Stock exchanges in Shanghai, Hong Kong, Seoul and Tokyo plunged up to 4 per cent in their morning sessions.
On Wall Street, the Dow Jones Industrial Average dropped 1,190.95 points, its largest one-day point drop in history, bringing its loss for the week to 3,225.77 points, or 11.1 per cent.
The S&P 500 has now plunged 12 per cent from the all-time high it set just a week ago.
World oil prices too tumbled by more than 4 per cent overnight as traders fretted about the impact of spreading coronavirus on crude demand, particularly from key consumer China.
Brent crude oil futures fell another 2.47 per cent to USD 50.45 per barrel early in the day.
The rupee depreciated 28 paise to 71.89 against the US dollar in the morning session.
(With inputs from agencies.)