Home / Markets / Stock Markets /  Pandemonium in markets, India singed in global meltdown

NEW DELHI : The rout in global stocks deepened on Thursday as investors were rattled by the extreme measures taken by government to prevent the spread of Covid-19.

Terrible Thursday

Indian stocks suffered their biggest ever drop in terms of points, as the market crash wiped off 11 trillion in investor wealth. The Sensex shed as much as 3,204 points before ending the session 2,919.26 points lower or 8.2% down at 32,778.14. Investors tried to come to grips with the economic fallout of the government’s efforts to contain the spread of Covid-19. Even defensive stocks such as Hindustan Unilever Ltd and ITC Ltd dropped 4%-11%.

Bear bulldoze

Trading was halted for the second time this week in the US after a 7% fall in the Dow and the S&P500 each triggered circuit breaker. Japan’s Nikkei 225 lost 4.4%, Hong Kong’s Hang Seng 3.6% and China’s Shanghai 1.5%. The European Central Bank sprang a surprise by keeping rates unchanged. This sent the indices—the UK’s FTSE 100, the German DAX and French CAC 40—down by 9%-11%.

Graphics: Mint
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Graphics: Mint

RBI quickfix

As part of a global coordinated action, the Reserve Bank of India too did its bit to calm nerves. The central bank will undertake 6-month US dollar sell/buy swaps in order to provide liquidity to the forex market. It will offer $2 billion on Monday.

Fed antidote

The US central bank announced a massive increase to its cash injections into financial markets. The New York Fed said it will offer $500 billion in three-month funds called repurchase agreements or “repos" on Thursday and Friday, and $500 billion in one-month repos on Friday. Over the coming month, it will provide $500 billion a week of one- and three-month repos. “These changes are being made to address highly unusual disruptions in treasury financing markets," the New York Fed said.

World’s woes

China, where the deadly coronavirus originated, said it has passed the peak of the epidemic. The virus has, now spread to at least 116 countries. The US suspended travel from all European countries barring the UK and Ireland

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