The benchmark indices continue to trade in the red, albeit off the lows of the day, due to increasing concerns that global economic growth could be impacted by rising number of coronavirus cases outside China.
At 12:00 pm, the BSE Sensex was quoting at 40,820, weaker by 350 points or 0.8 per cent, after recovering nearly 150 points from the lows touched at opening bell, and the NSE Nifty was at 11,970, down 110 points or 0.9 per cent. The broader markets were outperforming the benchmark indices, with the BSE Midcap index shedding 0.2 per cent to 15,660 and the smallcap index losing 0.3 per cent to 14,699. All the NSE sectoral indices were trading in the red, with the exception of the IT index.
Chinese President Xi Jinping said on Sunday the coronavirus epidemic is the country’s “largest public health emergency”. The death toll from the deadly virus has already climbed to 2,592. The IMF also warned that the deadly epidemic could put an already fragile global economy recovery at risk.
On the commodities front, oil prices plunged this morning; Brent crude futures were down 3 per cent to $56.73 per barrel and US crude futures contract dropped 2.7 per cent to $51.93 per barrel.
Experts reckon that the markets may be volatile this week due to the expiry of February derivative contracts on February 27 and developments surrounding the coronavirus. The US President Donald Trump would be visiting the country for two days, i.e. February 24-25, and this would also be something to watch for.
Metal stocks were leading the decline on the NSE, with Hindalco, Tata Steel, JSW Steel and Vedanta shedding around 3 per cent each on the NSE.
IT stocks were bucking the weak trend, with Infosys and Tech Mahindra gaining half per cent to 1 per cent each, as the rupee depreciated to seven-week lows. A fall in rupee is good news for technology companies as a bulk of their revenues come in US dollars.SBI was also trading with gains of half a per cent ahead of SBI Cards’ Rs 9000 crore IPO, which is to open for subscription on March 2. SBI holds 76 per cent in SBI Cards.
The market breadth was weak. Out of 2,331 stocks traded on the BSE, there were 823 advancing stocks as against 1,352 declines.