Sensex Collapses Over 1,500 Points; Nifty Opens Below 9,500

Mon, 16 Mar 09:30 am

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Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.5% while the Hang Seng is down 2.3%. The Nikkei 225 is trading up by 0.1%. Wall Street staged a furious rally in the waning moments of the session on Friday after US President Donald Trump declared a national emergency to combat the rapidly spreading coronavirus, although major averages still suffered sharp losses for the week.

Back home, India share markets plunged again in the opening session. The BSE Sensex is trading down by 1,516 points while the NSE Nifty is trading down by 476 points. The BSE Mid Cap index opened down by 1.3%, while BSE Small Cap index opened down by 1.2%.

All sectoral indices are trading down with bank stocks and metal stocks witnessing maximum selling pressure.

The rupee is currently trading at 73.84 against the US$.

Yes Bank share price is in focus as the crisis hit bank on Saturday reported a record loss of Rs 185.6 billion for Q3 FY20 due to a sharp jump in bad loans and higher provisioning. Also, as per the final reconstruction scheme for Yes Bank, 75% of the shareholding of the shareholders holding 100 or more shares will be locked-in for three years.

In one of the articles, we have written about the entire timeline of how YES Bank went from a stock market darling to a pariah. Read the article here: How the YES Bank Collapse Unfolded - 10 Points.

In the news from the global economy. The US Federal Reserve and global central banks moved aggressively on Sunday to buttress a world economy unraveling rapidly amid the coronavirus pandemic, with the Fed slashing interest rates to near zero, pledging hundreds of billions of dollars in asset purchases and backstopping foreign authorities with the offer of cheap dollar financing.

The Federal Reserve said that it has decided to lower the target range for the federal funds rate to 0-0.25%.

It expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goal.

In a news conference Federal Reserve chairman Jerome Powell said the epidemic was having a "profound" impact on the economy, forcing whole industries like travel and leisure offline.

Yet the ultimate spread of the virus is so uncertain, Powell said, the Fed called off quarterly economic forecasts due this week as a futile exercise until it is clear how many people will get sick, and how long public gatherings will need to be discouraged in the name of public health.

Note that, last week was the worst week for global markets. You can read how deep the impact of coronavirus pandemic was felt on the stock markets worldwide in 10 points here.

Speaking of gloomy economy, coronavirus fears, falling markets and crude oil prices, Ajit Dayal has written an insightful piece, sharing his views in the latest edition of The Honest Truth.

Here's a snippet from the article:

• Is the meltdown over?
  
  While the unravelling of the debt excess in the US and the developed world may have some more to play out, the question on an investor's mind in India is: Is the mayhem over and what should I do next?
  
  On the face of it, there is some interesting Upside Potential, or potential profit, if you were to buy the specific stocks now and assume, they get back to their past peak levels over, say, the next 2 to 3 years.
  
  With the help of either some jaadu mantar or some good policy.
  
  But there are some "bets" I would be very cautious about: Yes Bank, Reliance and the INR, for instance.

You can read his entire article here: The Market Gets a Viral Attack.

Also, speaking of coronavirus and its impact on the Indian stock markets, in one of the recent podcast, we had shared a special episode from Investor Hour...

In this emergency episode of the Investor Hour, Rahul Goel talks to Vijay Bhambwani, who he calls India's #1 trader.

Vijay dives deep in this "coronavirus" situation and presents a picture which we believe would be extremely beneficial to any investor or trader.

Whatever you do, don't miss this emergency issue of the Investor Hour!

Listen in here...

Moving on to the news from IPO space. The equity shares of SBI Cards and Payment Services, the country's second largest credit card issuer after HDFC Bank, will be listed on bourses today.

It will be the first listing in the current calendar year.

The credit card issuer had fixed final IPO price at Rs 755 per share, the higher end of price band (of Rs 750-755) and the employees received shares at a discount of Rs 75 per share to the final price.

The public issue was subscribed 26.5 times during March 2-4 but was less than market expectations due to weak market conditions after wide-spreading novel coronavirus that has taken many lives with more than 1.3 lakh infected cases globally.

Speaking of IPOs, in one of the editions of The 5 Minute WrapUp, Ankit Shah shared how IPOs offer insights into the mood of the stock markets.

He picked the six most successful IPOs of the year and checked the retail investor enthusiasm for them.

Obviously, all these IPOs were oversubscribed across investor categories. But the level of retail investor enthusiasm differed widely, depending on the overall market sentiments.

This can be seen in the chart below:

Are Retail Investors Back in the IPO Game?

Here's what Ankit wrote about it...

• Clearly, IRCTC witnessed the highest number of bids for the retail category. Factoring in the discount of Rs 10 per share for the retail category, the total bids were worth a whopping Rs 3,242 crore. Over five times the entire IPO size!
  
  Polycab India and the recent IPO of CSB Bank also received a strong thumbs-up from retail investors.

Does this hint that retail investors are coming back to the markets? Could we witness of flurry of IPOs in the coming months?

It would be interesting to see how this trend pans out in 2020.

We will keep you updated on all the developments from this space. Stay tuned!

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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