Sensex Tanks 811 Points; Nifty Ends Below 9,000 Mark

Tue, 17 Mar Closing

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The mayhem continued on Dalal Street today as well as Indian share markets ended deep in the red with Sensex and Nifty witnessing a sharp fall during closing hours.

While Indian share markets opened on a negative note today, losses were recovered thereafter as indices rose sharply over 500 points. The gains were again wiped out amid panic selling as coronavirus fears mounted.

Barring FMCG sector, all sectoral indices ended on a negative note, with stocks in the banking sector, finance sector and telecom sector, leading the losses.

At the closing bell, the BSE Sensex stood lower by 811 points (down 2.6%) and the NSE Nifty closed down by 229 points (down 2.5%).

The BSE Mid Cap index and the BSE Small Cap index ended the day up by 1.4% and 0.6%, respectively.

Asian stock markets finished on a mixed note. As of the most recent closing prices, the Hang Seng was up 0.9% and the Shanghai Composite stood lower by 0.3%.

The rupee is trading at 74.20 against the US$.

Our bluechip stock analyst at Equitymaster, Tanushree Banerjee, believes that the ongoing market crash could, in fact, be an inflection point for what she calls the irreversible Rebirth of India megatrends.

Here's what she has to say more on this...

• Companies across the globe, will seek to diversify geographic risks after this crisis.
  
  India could see a big spurt in new factory capacities and fresh fund inflows. This trend, can widen the moats of the strongest bluechips.
  
  I believe, it can also help multiply their profits 4 to 8 times over the next decade.
  
  The time is ripe for StockSelect subscribers to begin buying some of the safest bluechips, right now.
  
  There is safety in valuations as the market offers them at deeper and deeper bargains.

Tanushree is recommending her subscribers, to buy stocks selectively, a few at a time, by taking partial exposures to begin with. She has already recommended 4 safe bluechips in the past month and there are several more in her watchlist. You can access them here: Here's How You Could Trade the Coronavirus Crisis Safely (requires subscription)

And if you are not a StockSelect subscriber, here's where you sign up.

In the video below, Tanushree has also explained how buying the above stocks at bargain prices is a once in a decade opportunity.

Our smallcap analyst at Equitymaster, Richa Agarwal, believes this is a time to not panic and remain invested in the good quality smallcap stocks, irrespective of the volatility.

She believes the best approach is to consider investing in stocks that are fundamentally strong and promise steady income along with strong upside in the long term.

Richa's latest webinar - Smallcap Rebound Opportunity in the Times of Coronavirus shares a list of open positions where the rebound potential is strong... And until the rebound, one can enjoy regular income from the dividend stocks with yields up to 9%.

In news from the energy sector, Oil and Natural Gas Corporation's (ONGC) board approved an interim dividend of Rs 5 per share at its meeting held on Monday.

In a BSE filing, the company said that the record date for the said dividend is 24 March 2020.

The company also stated that during the last few days due to sudden and sharp decline in crude oil prices, the share prices of oil sector entities have witnessed a lot of volatility, and particularly the share prices of the upstream companies have been hit hard.

The state-run oil producer is set to adopt a balanced approach towards capital spending and expects the government to take favourable policy measures to boost the company's performance.

Note that, stock of ONGC has declined more than 35% in the past two weeks as global crude oil prices continue to fall with oil producing countries refusing to cut output.

In a recent article, we have written the entire timeline showing economics of falling crude oil prices. You can check the same here: All About the 30% Crash in Crude Oil - 10 Points

ONGC share price ended the day up by 0.1%.

In news from the commodity space, domestic gold prices extended their decline, falling more than 1% today following a steep correction in global rates.

In global markets, gold prices edged lower today, extending their recent loss as investors preferred to sit on cash amid heightened panic in financial markets over the coronavirus pandemic.

Note that, gold prices have fallen around Rs 5,000 in previous five sessions, falling from Rs 44,500 levels.

In one of his videos, Vijay Bhambwani shares his view on gold and silver prices. He talks about how the bullion prices will move in the short term.

You can check the same here: Will Gold and Silver Prices Fall because of the Coronavirus?

Moving on to news from the IPO space, Burger King India on Monday joined a growing list of companies putting their initial public offerings (IPO) on hold.

As per a leading financial daily, the company initially planned to launch the issue before the end of this month to raise about Rs 4 billion.

Last week, Rosary Biotech shelved its IPO plan due to fear spillover.

On Monday, Antony Waste Handling Cell had to withdraw its IPO as the issue failed to receive requisite subscription even after an extension of its initial subscription period. It became the first mainboard IPO of the year to go unsubscribed.

The issue attracted bids for only 24,08,200 shares against the total issue size of 48,24,544 shares.

The IPO was initially opened for three days from March 4 to 6, but later the subscription period was extended till March 16.

A number of IPOs, including Home First Finance and Equitas Small Finance are waiting for regulatory nod from the markets regulator.

As of March 13, the market regulator was considering seven more applications including those of UTI AMC, Esaf Small Finance Bank, CAMS, Likhitha Infrastructure, Stove Kraft, NCDEX and Barbeque Nation.

Speaking of IPOs, note that the mega issue by SBI Cards and Payment Services saw a tepid listing at a 13% discount to issue price of Rs 755, on Monday.

The public issue was subscribed 26.5 times during March 2-4 but was less looked after than market expectations due to weak market conditions after wide-spreading novel coronavirus.

If you recall, the market correction had started a week prior to the opening of the SBI Cards IPO. Just the week before the IPO opened for subscription, the Sensex had tanked 7% in unison with the global stock market sell-off.

Have a look at the chart below. It shows the trend in the total market capitalisation of all BSE-listed companies since the start of 2020.

Coronavirus Triggers Massive Wipeout of Investor Wealth

Here's what Ankit Shah wrote about this in a recent edition of The 5 Minute WrapUp...

• As you can see, through most of January and February, the total market capitalisation hovered between Rs 150-160 trillion.
  
  It was only in the last week of February that a massive sell-off started on rising fears of the coronavirus outbreak escalating into a global pandemic.
  
  On 2 March, the day the SBI Cards IPO opened for subscription, the total market capitalisation of BSE-listed companies closed at about Rs 146 trillion. Do recall that this was after the 7% crash in the Sensex the previous week.
  
  By 13 March, this figure plunged even lower to Rs 129 trillion.
  
  So, from the time of the IPO opening for subscription to a day prior to listing, investor wealth worth Rs 17 trillion got wiped out, representing a plunge of over 11%.

But investors were still optimistic about the IPO. The grey market premiums were in the range of Rs 250-300 per share. Investors were expecting listing-day gains of about 25-30% or more.

But as the market crash got deeper, the market sentiments have completely changed.

If you received allotment in the IPO, you're most likely evaluating if you should bite the bullet and exit the stock, or hold it for the long run.

Ankit Shah has offered some insights on what should one do with the IPO if you have received the allotment. You can read his entire article here: Did the SBI Cards IPO Test Positive for Coronavirus?

And 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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