Bombay Stock Exchange's equity indices that crumbled during early hours on Friday continued to be sluggish as global share prices headed for the worst week since the world financial crisis in 2008 with global investors readied for the coronavirus to become a pandemic. Well, though Coronavirus has been a major factor for the markets to down globally, there are several other factors that led to the market crash.
Here is why the Indian markets spooked on Friday;
Coronavirus that killed over 2,800 people in China has had an impact on the monetary markets as well as non-monetary markets. The outbreak has led to a downfall of exports of China and imports of other countries. India, being one of the major importer of commodities from China, has seen a major setback in its imports.
Global share markets headed for the worst week since the depths of the 2008 financial crisis as investors moved away from risky assets on fears the coronavirus will become a pandemic and derail economic growth. While Coronavirus still remains the major reason of the crash in markets, there are several other factors dragging down the indices.
US indices hit lowest record
The US markets that crashed overnight dampened the indices across global markets. The S&P 500 was down by 12%, which was close to it February 19 record. US markets saw the biggest sell-off in over a decade on Thursday with the Dow Jones Industrial Average plunging by 1,191 points to close at 25,767. The S&P 500 slid by 4.4 per cent the Nasdaq Composite dropped by 4.6 per cent.
Foreign portfolio investors
The FPIs has offloaded shares worth Rs 3,127 crore on Thursday making the sales to reach nearly Rs 10,000 crore in last four days.
GDP growth rate
Another reason for the markets to crash is the GDP growth rate that has been sliding for the quite some time. National Statistical Office will release its data on the GDP growth rate of the quarter ended December on Friday. State Bank of India has said that the growth is likely to remain at 4.5% in Q3.
Asian stocks in China, Japan and South Korea posted heavy losses after an overnight plunge in Wall Street's benchmarks.
MSCI's regional index excluding Japan shed 1.4 per cent while Japan's Nikkei gave up 3.3 per cent on rising fears that the Olympics planned in July and August may be called off due to the coronavirus.
South Korean shares dropped by 2.1 per cent as new infections reported around the world now surpass those in China.
All sectoral indices at the National Stock Exchange were in the red with Nifty metal down by 4.6 per cent, realty by 3.89 per cent, IT by 3.36 per cent and pharma by 2.32 per cent.
At 3.19 pm, the share market was down by 1353.97 points (-3.41%) at 39,391.69.