Sensex crashes 4,000 points over banking sector uncertainty

PALAK SHAH Mumbai | Updated on March 23, 2020

Movement curbs disrupt brokerage work with staff unable to reach office

Fear over the coronavirus epidemic continued to spook key indices on Monday even as the stock market could not function to its full strength as many brokerages remained locked across the country.

The Sensex and Nifty witnessed their biggest ever intra-day fall. Continuous selling by foreign portfolio investors in risk assets like stocks has had a brutal impact on the rupee and exacerbated its fall to a new lifetime low of 76.32 against the US dollar.

The clamour for a complete shutdown of markets is growing as stock brokers said their offices are not fully functional on the back of a nationwide lockdown to limit the spread of Covid-19.

The Sensex crashed by 4,000 points or 13.2 per cent to close at 25,980 points. The Nifty index crashed by 13 per cent or 1,135 points to 7,610. At the start of the day, trading had to be suspended for 45 minutes as the Sensex hit the 10 per cent lower circuit on opening.

Bank Nifty Index plunges

Between the lifetime high levels and Monday’s low the Sensex and Nifty are now down 38 per cent. On Monday, the the Bank Nifty Index fell the steepest, dropping 5,000 points or nearly 20 per cent in intra-day trading. The index closed at 16,917, falling 16.73 per cent or 3,399 points.

The Bank Nifty index is down 49 per cent from its lifetime high levels. Traders say, markets are fearing a prolonged banking crisis in India even after the tensions over Covid-19 subside.

“Our markets must be closed for trading, because our staff is being pulled out of offices and they (the police) are sealing office buildings. Prime Minister Modi wants complete isolation of people and we are asking those related to capital markets to step out even when transport is not available to reach offices. In fact, India should take the lead on even pressuring the global regulators to close markets till the situation returns to normal as these are unprecedented conditions and no time to indulge in derivative gambling,” said Deven Choksey, Managing Director, KR Choksey Investment Managers.

The social media is divided on whether markets should be shut for a few days.

Stock exchanges have allowed shifting of trading terminals home but brokers are yet to put that into effect.

Even commodity market-linked brokers were worried over the functioning of the futures market in this segment when the major trading markets for underlying commodities, including agri and bullion, were shut.

A total shutdown has been announced across 75 districts in India. In Mumbai, Rajasthan and Gujarat, the markets were open but in many States, market workers have not been classified as essential service providers. Commodity markets function till 11.50 p.m.

Published on March 23, 2020

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