Sensex today fell nearly 1950 points in its worst one-day selloff in absolute points

5 factors behind the market mayhem , Because of Coronavirus Sensex suffers worst one-day fall in history

• Investors lose nearly ₹7 lakh crore on coronavirus fears as Sensex sees biggest one-day fall in absolute terms
• Rupee slips past 74 per US dollar on weak equities, coronavirus-led slowdown fears

Indian markets suffered their worst single-day fall in absolute terms amid a global selloff as panic over the economic fallout of the coronavirus outbreak intensified. A 25% slump in oil prices also hit the risk sentiment. The NSE Nifty 50 index closed down 4.90% at 10,451.45. BSE Sensex ended 5.17% or 1,941 points lower at 35,634, wiping out nearly ₹7 lakh crore of investor wealth. The country's markets regulator, the Securities and Exchange Board of India, issued a statement on the market selloff, saying: "The perceived economic fallout from COVID-19 coupled with steep fall in global crude prices led to volatility in securities market."

Indian markets suffered their worst single-day fall in absolute terms amid a global selloff as panic over the economic fallout of the coronavirus outbreak intensified. A 25% slump in oil prices also hit the risk sentiment. The NSE Nifty 50 index closed down 4.90% at 10,451.45. BSE Sensex ended 5.17% or 1,941 points lower at 35,634, wiping out nearly ₹7 lakh crore of investor wealth. The country's markets regulator, the Securities and Exchange Board of India, issued a statement on the market selloff, saying: "The perceived economic fallout from COVID-19 coupled with steep fall in global crude prices led to volatility in securities market."

Here are 5 things to know about today’s market selloff

1) The number of people infected with the coronavirus has topped 110,000 globally as the outbreak reached more countries and some experts have raised the spectre of global recession if the spread continues. Back in India the number of coronavirus cases has risen to 43. The rupee was down also ended at 74.08 against the dollar.

“Global recession risks have risen. The longer the outbreak affects economic activity, the demand shock will dominate and lead to recessionary dynamics. In particular, a sustained pullback in consumption, coupled with extended closures of businesses, would hurt earnings, drive layoffs and weigh on sentiment. Such conditions could ultimately feed self-sustaining recessionary dynamics. Heightened asset price volatility would magnify the shock," Moody’s Investors Service said in a note.

2) Unnerving already panicked investors, oil prices sank more than 25% in their biggest one-day rout since the Gulf War after Saudi Arabia launched a price war with Russia. Analysts expect the decline in crude prices to help boost economic growth in India, one of the world's top oil importers, but shares in large oil companies slumped on Monday. State-run ONGC recorded its worst fall since 1995, dropping nearly 16%, while oil-to-telecoms conglomerate Reliance Industries Ltd dived 13%.

3) “The Indian markets continued the downslide led by weak global cues owing to crash in crude oil prices. The benchmark indices witnessed its biggest one-day fall as the selling pressure mounted and the Nifty index plunged down 4.9% to close at 10,451 levels. We expect Indian markets to remain under pressure in the near-term since the sentiments are weak on the worries of slowdown across the globe. Investors would continue to monitor crude oil prices, currency movement and the updates on spread of coronavirus cases as these factors are keeping the markets on edge," said Ajit Mishra, VP - Research, Religare Broking Ltd.

4) Selling by foreign institutional investors have also contributed to the sharp selloff in Indian markets. Month till date, foreign investors have sold domestic equities worth over ₹10,000 crore. Vinod Nair, Head of Research at Geojit Financial Services, said: "Risk of recession increased fuelled by crash in crude oil prices and increasing virus cases outside China. Even though fall in crude oil prices is positive for India in the long term, short term concerns weighed with FII outflow in emerging markets. Coronavirus fear is intensifying and fresh travel bans seems to hurt the global economic sentiments more than feared".

5) There is extreme panic and risk aversion at this point in global markets, IFA Global said in a note. US bond yields have hit new lows as investors bought them up as safe havens. “Bears hammered the index hard and Nifty tested 10,300 zone on the downside. Important support levels have been breached. Bottom fishing should be avoided until the markets indicate fatigue on the downside. Nifty has tested the weekly 200 exponential moving average (EMA) which is placed at 10,370 zone. Index is likely to face stiff resistance as and when recovery happens and volatility is likely to remain higher. The immediate resistance zone is placed at 10,800 zone," said Manav Chopra, head of research at Indiabulls Securities. (With Agency Inputs)

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