Sensex Plunges Nearly 3,000 Points, Hits 10% Lower Circuit

Although the markets saw an across-the-board selling, bank and auto stocks were the worst hit.

New Delhi: India’s stock markets plunged on Monday morning, triggering technical limits that halted trading for 45 minutes.

The Sensex tanked by 10% or nearly 3,000 points to hit 26,924 before trading was stopped. The Nifty50 index similarly fell 842 points, or 9.63%, to 7,903.

This is the second instance of a halt in trading in the Indian markets in a span of 10 days. Earlier, on March 13, the Nifty hit the lower circuit in opening deals for the first time since May 2009.

Although the markets saw an across-the-board selling, bank and auto stocks were the worst-hit. The Nifty Bank index was down 12.7%. Axis Bank and ICICI Bank both plunged over 10% each while Maruti Suzuki India was down 9.7%.

In the broader market, the S&P BSE MidCap index was trading with 6.9%cut and the S&P BSE SmallCap index was down 6.4%.

Trading will likely resume at 10:57 am. A ‘circuit breaker’, which is what stopped trading, is a mechanism which is triggered when the price fluctuation moves beyond a threshold value stipulated by the stock exchange. The index-based market-wide circuit breaker system applies at three stages of the index movement, either way, i.e. at 10%, 15% and 20%. These circuit breakers when triggered bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by the movement of either the BSE Sensex or the Nifty50, whichever is breached earlier, explains National Stock Exchange (NSE).

On the global front, Asian shares sank as a rising tide of national lockdowns threatened to overwhelm policymakers’ frantic efforts to cushion what is likely to be a deep global recession. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 3.8%, with New Zealand’s market shedding a record 10% as the government closed all non-essential businesses.

In commodities, oil prices fell.

Brent crude futures fell $1.09, or 4%, to $25.89 a barrel by 0209 GMT. West Texas Intermediate (WTI) crude futures was down 15 cents, or 0.7%, at $22.48 a barrel, said a Reuters report.

(With inputs from agencies and Business Standard)