India Stocks Extend Slump as Virus Threatens Fragile Economy
India Equity Sell Off Resumes as Virus Threatens Fragile Economy
(Bloomberg) -- India’s benchmark stock index slumped to its lowest since September 2017 after entering a bear market last week amid concern that the novel coronavirus outbreak may threaten the nation’s already fragile economy.
The S&P BSE Sensex fell 8% to 31,390.07 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 declined 7.6% on Monday.
India’s NSE Volatility Index, the stock market’s fear gauge, climbed to its highest 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
Indian 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 equity strategists including Neelkanth Mishra wrote in a note. “We are still not at a level that suggests the aggressive selling is done.”
The trajectory of the Covid-19 outbreak remains difficult to chart and incorporate in earnings, Citigroup analysts Surendra Goyal and Vijit Jain wrote in a note.
The Numbers
- All 19 sector indexes compiled by BSE Ltd. slid, led by a gauge of metal companies
- Housing Development Finance Corp Ltd. contributed the most to the index decline, decreasing 11% while IndusInd Bank Ltd. had the largest drop, falling 18%
Market-related stories
--With assistance from Ronojoy Mazumdar.
To contact the reporter on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Margo Towie, Paul Jarvis
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