Markets test investors' nerves with wild swings

Mumbai: The domestic stock markets took investors on a gut-churning ride on Friday, with trading being halted for the first time in 12 years as benchmarks plunged over 10 per cent in opening trade, before staging an emphatic comeback powered by banking, finance and energy stocks.

The BSE and NSE suspended trading for 45 minutes a little past 9.20 am after the Sensex and Nifty plunged in tandem with global markets as the Coronavirus pandemic triggered recession fears. However, domestic indices surged after trading resumed as investors snapped up recently-battered stocks available at attractive valuations. Expectations of stimulus measures by the US and other countries also buoyed sentiment, analysts said.

Recovering over 5,380 points from its intra-day low of 29,388.97, the BSE Sensex ended 1,325.34 points or 4.04 per cent higher at 34,103.48. Similarly, the NSE Nifty settled 365.05 points, or 3.81 per cent, up at 9,955.20.

It hit an intra-day low of 8,555.15. Most Sensex components ended with gains. SBI was the top gainer, rallying 13.87 per cent, followed by Tata Steel, HDFC, Sun Pharma, Bharti Airtel, Bajaj Finance and ICICI Bank. On the other hand, Nestle India, Asian Paints, HUL, Hero MotoCorp and HCL Tech shed up to 4.12 per cent.

During the holiday-shortened week, the Sensex plummeted 3,473.14 points or 9.24 per cent, while the Nifty lost 1,034.25 points or 9.41 per cent. The benchmarks posted their biggest ever one-day falls in two sessions this week (March 9 and 12). Investor wealth worth around Rs 15 lakh crore has been wiped off in the past four sessions. "This week will go down in history as one of the worst weeks for global markets. Consider this, the US market had declined 18 per cent in just the first four days of trading. Markets have been battered by the potential economic impact on account of various preventive travel measures by major countries. FPIs sold equities worth $2.3 billion over the past five trading sessions, while DIIs bought $1.8 billion worth of equities in the same period," said Sanjeev Zarbade, V-P, Kotak Securities.

All sectoral indices ended with gains, with BSE telecom, metal, oil and gas, finance, banking and energy indices rallying up to 6.39 per cent. Broader midcap and smallcap indices too settled on a positive note. As per norms, trading is halted for 1.45 hours if there is 15 per cent movement before 1 pm and 45 minutes for such movement between 1 pm and 2 pm. Geojit Financial Services Chief Investment Strategist VK Vijaykumar said the last time there was a circuit freeze and trading halt was on January 22, 2008. There was also a brief trading halt on the National Stock Exchange on October 5, 2012, due to a freak trade. Sebi on Friday said the regulator and stock exchanges are prepared to 'take any action' as required to deal with market volatility.

Chief Economic Advisor (CEA) Krishnamurthy Subramanian also said the government and the RBI will take all necessary steps to quell the 'fear sentiment' created due to the coronavirus outbreak. Meanwhile, official data released after market hours on Thursday showed that India's factory output rose marginally in January.