JOIN USDalal Street marks its fastest bear run; Sensex closes below 29,000 mark
The Indian markets have marked their fastest bear run as the benchmark indices have collapsed by 23% in just seven days, after over 5.5% bashing on Wednesday which saw Sensex crashing close below the historic 29,000-mark for the first time in three years.
With both indices crashing more than 20% in the past seven days, this is the fastest bear market in India’s history. Even after the collapse of Lehmann Brother in the US, which led to the financial meltdown, Indian shares weren’t hit this hard.
While, both the benchmark indices opened about 1.5% higher on Wednesday morning, within the first half an hour of the trade, sell-off began. As the day went by, the sell-off in the markets intensified after foreign funds started pulling out from the Indian markets.
As the European markets, which have been worst hit by the coronavirus outbreak started trading, Indian indices tumbled due to foreign fund outflow.
The 30-share Sensex, which has now marked its top four losses in a span of seven trading sessions, closed at 28,869.51, down 1,710 points (5.59%) over its previous close.
There were only four blue-chip companies on Sensex that closed in green – ONGC, SBI, TCS, and ITC. All the remaining scrips led by IndusInd Bank were in deep red.
The overall market sentiment was also highly negative, with 1,985 decline against just 395 advances. During the mayhem, equity investors lost yet another Rs 5.5 lakh crore, taking the total hit from coronavirus to an astounding Rs 46 lakh crore.
The situation was no different in the broader index 50-share NSE Nifty performed, as it collapsed by 5.56% (498 points) to close at 8,469.
Indian equity markets tanked about 10% below the consensus estimates for this week by the analysts on Dalal Street. Most analysts had predicted Nifty to be above 9,400-mark this week.
To give a perspective, since, January, Sensex has collapsed by 13,138 points, which is 6% more than the Nifty’s all-time high of 12,430.50.
Any further correction in markets can lead up to a further crash of 12% in the Indian markets, analysts say.
“Currently, 8,500 is crucial for Nifty and a close below the same will open the door for 7,900 and 7,500 levels. On the flipside, till the time Nifty doesn't close above 9200 levels, bears will have upper hand and bounces shall be used as shorting opportunity,” says Chandan Taparia of Motilal Oswal.