Volatile Day for Indian Indices: Sensex Ends 2% Lower Post Rebound; Auto and Metal Stocks Bleed

Thu, 19 Mar Closing

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It was a volatile day for India share markets today.

The benchmark indices opened deep in the red, recovered sharply during noon hours, and again went to witness selling pressure during closing hours.

At the closing bell, the BSE Sensex stood lower by 581 points (down 2%) and the NSE Nifty stood down by 199 points (down 2.3%).

The BSE Mid Cap index ended the day down 3.7%, while the BSE Small Cap index stood down by 4.5%.

All sectoral indices ended deep in the red with stocks in the metal sector, auto sector and energy sector witnessing maximum selling pressure.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down by 2.61% and the Shanghai Composite was down by 0.98%. The Nikkei 225 was down 1.04%.

European markets were trading on a mixed note. The FTSE 100 was down by 0.35%. The DAX was trading up by 0.17%, while the CAC 40 stood up 1.93%.

The rupee was trading at 75.09 against the US$.

The rupee opened 73 paise down at 74.96 against the US$ today, amid sustained foreign fund outflows and heavy selling in domestic equities.

The domestic currency hit a fresh record low of 75.01 against the dollar, tracking slump in equities and currencies globally. Investors were concerned that support measures from governments and central banks may be insufficient to halt the economic damage caused by the coronavirus pandemic.

A sharp rise in coronavirus cases further dampened the sentiment.

Yesterday, the domestic currency had settled 2 paise lower at 74.26 against the greenback.

With the volatility we're witnessing amid the gloomy economy and coronavirus fears, what's next for the Indian stock markets?

You have the answer to this!

Participate in Equitymaster's "State of the Markets" poll and make your opinion count.

60 seconds is all that this anonymous poll will take.

Participate here: Equitymaster's "State of the Markets" Poll

Speaking of the ongoing coronavirus pandemic and the Indian economy, here's what Tanushree Banerjee wrote about the same in today's edition of The 5 Minute WrapUp...

• The coronavirus impact has woken everyone up. The dependence on one country and its dangers have been exposed to the whole wide world.
  
  There are short-term and long-term impacts of this wake-up call.
  
  The short-term impact is what we're seeing every day. Countries in lockdown, screening of travelers, quarantines, etc.
  
  But what about the long-term impact?
  
  We will see this once the crisis is over.
  
  And this impact will be huge.

Also, talking of the Indian economy, 1991, in a lot of ways, can be termed as the turning point of India's economic story.

From being largely isolated from the outside world, India suddenly became a big part of the new global era.

Exports also became a big contributor to India's GDP. From contributing around 7% of GDP before 1991, exports contribute close to 20% of GDP now.

Is This the 1991 Moment for India Again?

HYPERLINK ""

As per Tanushree, if things go India's way, as she believes it will, the aftereffect of the coronavirus will have an even bigger impact than 1991.

As per her, it will have a positive impact on what she calls the Rebirth of India.

She is focused on finding strong businesses with the capacity to take advantage of this huge opportunity.

And these businesses will create a lot of wealth in the long-term.

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

And here's what Richa Agarwal, our smallcap analyst at Equitymaster, has to say about the ongoing market crash and what it means for stock market participants...

• ...at a time when you see the Sensex and large cap stocks taking big knocks, you will be completely surprised at another feature of the market.
  
  It has flown under the radar for most investors so far...
  
  Small cap stocks, which were already cheap and attractive, have now become downright ridiculously priced!
  
  Many of them offer massive gains to those who will buy at current prices.
  
  And I'm not even talking about the weak companies...
  
  I'm talking about strong companies with ultra-strong balance sheets. Businesses strong enough to weather the oncoming coronavirus storm - whatever it throws at them.
  
  Looks like the perfect time for the opportunistic investor to pick up some good bargains!

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

She has identified one such stock that has the potential to return crores in the long term. To know more, click here for all the details.

In news from the banking sector, Yes Bank share price was in focus today after it was reported that the Reserve Bank of India (RBI) has given Yes Bank credit support of Rs 600 billion as the troubled private lender resumed full operation yesterday.

As per the news, the line of credit (LoC) was provided to ensure that Yes Bank is able to meet its obligations to depositors.

This was in line with RBI Governor Shaktikanta Das saying on March 16 that if required the central bank would provide necessary liquidity support and this should come as a comforting factor for depositors.

Moody's also raised Yes Bank's rating and upgraded its outlook to positive following the RBI presser.

The government on March 14 notified a rescue plan for Yes Bank, led by State Bank of India (SBI) and joined by other lenders, as it looked to shield the banking sector from a widespread crisis.

The so-called 'reconstruction scheme', cleared by the Union Cabinet, took effect on March 13.

As per the reports, most of Yes Bank's branches bore a deserted look today, partly amid fear of coronavirus infection.

On March 5, the RBI had imposed a moratorium on the private lender, restricting withdrawals to Rs 50,000 per depositor till April 3, in view of its poor financial health due to bad loans.

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. You can read the entire article here: How the YES Bank Collapse Unfolded - 10 Points.

In other news, the mutual fund industry added over 3 lakh investor accounts in February, taking the total folio tally to 8.88 crore.

However, the pace of growth in folio numbers dropped in February compared to the preceding two months.

In January, the industry added 14 lakh folios and in December, the number was over 6 lakhs. Mutual fund houses added just 2.6 lakh investor accounts in November.

According to data from Association of Mutual Funds in India (AMFI), the number of folios with 44 fund houses rose to 8,88,36,162 at the end of February, from 8,85,33,153 in the end of January, registering a gain of 3.03 lakh folios.

Number of folios under the equity and equity-linked saving schemes rose by 6.85 lakh to 6.18 crore in February-end as compared to 6.13 crore at the end of the preceding month. Notably, investment in equity mutual funds rose to an 11-month high of Rs 10,730 crore in February.

However, the number of folio count in debt oriented schemes dropped by 6 lakh to 61.88 lakh at February-end from 67.88 lakh at January-end.

The above rise comes at a time even as broader market witnessed heavy volatility amid concerns over the impact of coronavirus pandemic.

How this trend pans out in coming months remains to be seen. Meanwhile, we will keep you updated on all the developments form this space. Stay tuned!

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