NEW DELHI: Benchmark equity indices BSE Sensex and NSE Nifty tanked nearly 8 per cent on Monday due to panic selling amid the coronavirus pandemic.
The 30-share Sensex closed 2,713.41 points, or 7.96 per cent, down at 31,390.07, while the 50-share Nifty slipped 756.10 points, or 7.60 per cent, to 9,199.10.
Monday’s crash wiped out over Rs 7.50 lakh crore of equity investors' wealth. Market capitalisation of BSE-listed firms declined to Rs 121.72 lakh crore from Rs 129.26 lakh crore on Friday.
Amit Gupta, co-founder and CEO, TradingBells said, “It is best for investors to stay away from this market for a while till the time the volatility settles and we can see some notable reversals.”
Here is what caused the massive selloff:
Fed rate cut: Global markets took a hit after the US Federal Reserve slashed its key interest rate to shore up economic growth in the face of mounting global anti-virus controls that are shutting down business and travel. The US Fed cut rates back to near zero, restarted bond buying and joined other central banks to ensure liquidity in dollar lending. Asian peers Hang Seng and Shanghai were down up to 2.50 per cent in morning’s trade.
According to experts, a surprise 100 points rate cut by the US Federal Reserve is likely to scare investors more than cheering them as it reflects the fear among US policy makers about the severe impact of the virus outbreak on the world’s largest economy.
