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Markets recoil as coronavirus cases spike in India; bank, finance stocks slump

Mumbai, Mar 4 : Equity indices resumed their downward march on Wednesday as domestic investors were spooked by a sudden spike in coronavirus cases in India.

The government on Wednesday said 28 Covid-19 cases have been detected in the country so far, up from six as of Tuesday. This includes a group of 16 Italian tourists and their Indian driver.

Meanwhile, Union minister Prakash Javadekar said the government is proactively engaged in dealing with coronavirus, and the Prime Minister is monitoring the situation everyday.

After gyrating over 945 points during the day, the 30-share BSE Sensex settled 214.22 points or 0.55 per cent lower at 38,409.48.

The broader NSE Nifty closed 52.30 points or 0.46 per cent down at 11,251.

Banks were the biggest drag on the Sensex, with IndusInd Bank, HDFC Bank, SBI and ICICI Bank dropping up to 3.85 per cent.

Other laggards included Bajaj Finance, ITC, UltraTech Cement and Tata Steel.

On the other hand, Sun Pharma was the top gainer, spurting 2.86 per cent, followed by Asian Paints, Tech Mahindra and M&M.

"Fresh virus cases reported in India overshadowed monetary easing by Fed. Despite mixed global cues, the domestic market took a hit fuelled by weakness in metals, banks and auto stocks.

"Short term tremors due to virus could be felt across the globe including Indian indices but for the long term, the impact looks limited," said Vinod Nair, Head of Research, Geojit Financial Services.

BSE bankex, finance, basic materials, realty, FMCG, oil and gas, auto and metal indices ended in the red, while IT, healthcare and teck climbed up to 1.13 per cent.

Broader BSE midcap and smallcap indices ended up to 1.61 per cent lower.

Sebi is "internally assessing" the potential impact of the coronavirus epidemic on the capital markets, its Whole-Time Member S K Mohanty said.

Global stocks rallied after the US central bank cut its benchmark interest rate by a sizable half-percentage point in an effort to support the economy in the face of the spreading coronavirus.

Fed Chairman Jerome Powell noted that the coronavirus "poses evolving risks to economic activity".

The rate cut, however, failed to cheer Indian investors. There is still a lot of uncertainty on how the major economies will contain the spread of the virus, according to Ashika Institutional Equity Research.

"Thus, we remain skeptical that Fed rate cut will stabilise markets sentiments due to coronavirus outbreak," it said.

Bourses in Shanghai, Seoul and Tokyo ended on a positive note, while Hong Kong settled with losses.

Stock exchanges in Europe opened up to 1 per cent higher.

Brent crude oil futures rose 0.58 per cent to USD 52.16 per barrel.

On the currency front, the Indian rupee depreciated 14 paise to 73.34 per US dollar (intra-day).

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