Amid the unprecedented stock market mayhem, Krishnamurthy Subramanian, Chief Economic Adviser to the Government of India, has said that the current upheaval in the market is due to global factors adding that a large number of countries have had a huge decline in their stock markets owing to the outbreak of the deadly Coronavirus.
"Rusia, Brazil, France, Germany, Argentina, UK, US, and Japan, all these countries have had more than a 20 percent decline in their stock markets. India is actually below them. What we are seeing is a reflection of some of the global factors related to the Coronavirus episode," said Subramanian.
Amidst the increasing panic due to the soaring number of cases of Coronavirus in the country, the market mayhem escalated on Friday morning after the indices had opened at a 3-year low. The Sensex tanked 2,548.94 pts to 30,229.20 in the opening session while the Nifty plunged 729.95 pts to below 9000, the first time since 2017.
Following the bloodbath at Dalal Street with markets hitting the lower circuit limit, trading was halted for 45 minutes, the first since May 2008. and resumed after 10 am. The pre-auction call was said to resume from 10.05 am onwards and normal trading is said to begin from 10.20 am. The scale of losses also caused automatic circuit breakers to halt trading in Thailand, Indonesia and the Philippines.
Since the outbreak of the Coronavirus in the Chinese province of Wuhan, global markets have been severely hit with the standstill in trade. Analysts have stated that there is heightened volatility in global markets amid concerns over the rapidly-spreading coronavirus and sinking crude prices with them intending to sell-off. Several core sectors like led by financial, metal and energy stocks have been hit due to the deadly virus. As per the latest figures, at least 75 confirmed cases of COVID19 have been reported pan-India.
The fear of the virus has disrupted business supply chains globally. Last week Moody’s estimated that coronavirus has increased the risk of a global recession as advanced countries United States, Japan, Germany, Italy, France, Britain, and Korea battle the virus. First detected in Wuhan in December 2019, COVID-19- the novel Coronavirus has affected nearly 118 countries in the world. Presently, there are over 1,24,518 confirmed cases of COVID-19 which has led to the death of atleast 4,607 people.