Equities witnessed extreme volatility on Wednesday with the benchmark Sensex shedding more than 2% during intraday trading as the number of COVID-19 cases in India jumped to 28, leading to increased concerns that the economy might take a larger hit than previously expected.
The 30-share Sensex lost nearly 780 points during the afternoon session to touch a low of 37,846.10 before closing at 38,409.48, down 214.22 points, or 0.55%.
The broader Nifty settled the day at 11,251.00, shedding 52.30 points or 0.46%.
The market breadth was extremely weak with nearly 1,800 stocks losing ground on BSE, as against only 639 gainers.
Sharp decline
“The rise in coronavirus cases dented sentiment and triggered a sharp decline in the middle,” said Ajit Mishra, vice-president — Research, Religare Broking. “However, it rebounded in the latter half, considerably trimming losses,” he said.
“The recent surge in the coronavirus cases outside China has spooked the investors’ sentiment across the globe... the surprise rate cut by the U.S. Fed failed to cheer the participants and in fact, it has raised doubts about the health of the U.S. economy,” added Mr. Mishra.
Incidentally, the fall in the Indian indices came amidst a mostly positive trend in the Asian markets that rallied on the back of a surprise 50 basis points rate cut by U.S. Federal Reserve.
Foreign portfolio investors (FPIs) continued to offload Indian equities with Wednesday’s net sales pegged at ₹878 crore.
Meanwhile, the fall in the Sensex was led by stocks like HDFC Bank, ICICI Bank, ITC, Bajaj Finance and Kotak Mahindra Bank among others.