India Stocks Extend Slide Into Bear Market, Trigger Trading Halt
India Stocks Extend Slide Into Bear Market, Trigger Trading Halt
(Bloomberg) -- Indian stock trading was halted after plunging at the open, as concerns about the virus threatening global economic growth dragged down Asian indexes.
The S&P BSE Sensex declined 9.4% to 29,687.52 within minutes of opening Friday, while the NSE Nifty 50 Index dropped 10% triggering market-wide circuit breaker that halted trading for 45 minutes.
Both benchmark indexes fell more than 8% in the last trading session -- the most since October 2008 -- pushing the benchmarks into bear market. A further 15% slump on resumption of trading before 1 p.m. local time today will trigger another halt lasting an hour and 45 minutes, according to exchange rules.
Stocks tumbled in Asia early Friday following the worst Wall Street session since 1987, with investors spooked that emergency fiscal and monetary packages won’t be enough to stave off a recession.
India’s health ministry reported the country’s first death from the coronavirus. The country has 73 confirmed cases so far. On Wednesday, India suspended most visas until April 15 in a bid to halt the spread of the virus.
Meanwhile, Indian policy makers have pledged to use their record $481 billion foreign-currency arsenal to stem the market rout. The pledge comes after local markets plunged in line with global peers, forcing countries from Germany to Brazil to announce stimulus measures.
India’s NSE Volatility Index surged Thursday to a level last seen in 2009 as fear rattled the $1.8 trillion market. Overseas investors have withdrawn $2.7 billion from local stocks this month through March 11, set for the biggest outflows in 17 months.
Strategist Views
“There’s a global re-pricing of risk and India’s getting swept up in that wave,” said Rainer Michael Preiss, equity chief investment officer at the Global CIO Office in Singapore.
“We are seeing broad-based capitulation,” said Joel Ng, an analyst at KGI Securities (Singapore) Pte. “It’s also a chain reaction from market-wide deleveraging, margin calls and programmed trading funds exacerbating negative market sentiment.”
The Numbers
- All 19 sector indexes compiled by BSE Ltd. slid, led by a gauge of IT companies
- HCL Technologies Ltd. fell 15.6% to lead declines
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- India’s Nifty Index May Soon Test 9,000 Level: Target Investing
- Bank Seizure Snuffs Out Hope for Quick India Shadow Bank Revival
- Modi Dawdles on Reform Even After India’s Biggest Bank Failure
- Why India’s Financial Sector Keeps Blowing Up: QuickTake
To contact the reporter on this story: Ishika Mookerjee in Singapore at imookerjee@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Margo Towie
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