Published: Tue, March 24, 2020
Markets | By Otis Pena

Markets bleed, Sensex dives 4,000 points

Markets bleed, Sensex dives 4,000 points

Global equities rebounded nearly 2 per cent on Tuesday, off near four-year lows, and the dollar slipped as investors pinned hopes on unprecedented stimulus steps by the US Federal Reserve and other policymakers to ease strains in financial markets. While most of the planet goes into lockdown, traders gave massive thumbs up to the United States central bank's pledge to essentially print cash in a move not seen since the global financial crisis more than a decade ago. The top loser stocks were Axis Bank, IndusInd Bank, and Bajaj Finance while HDFC Bank, Reliance Industries, ICICI Bank, and HDFC remained the most active stocks.

After gyrating 1,823.97 points, the BSE barometer gave up some gains to end 692.79 points or 2.67 per cent higher at 26,674.03.

The reopening of the session provided no respite either as the Sensex plunged over 4,000 points - 4,035.13 to be precise - to touch a low of 25,880.83, before ending the day at 25,981.24, down 3,934.72 points, or 13.15%.

As of 12:48 pm, the Sensex traded 835 points or 3.2 per cent higher at 26,816 and the NSE Nifty 50 index climbed 3.5 per cent or 233 points to 7,843.

Despite the curbs imposed by Sebi on short selling on Friday, the market volatility does not appear to be decreasing.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the US Fed is now leading from the front with its historic package which includes open-ended purchase of securities, direct loans to companies, purchase of corporate bonds, lending against student loans and credit card loans.

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But the announcement sparked heavy criticism, with Labour chair Ian Lavery telling Ashley to "take some responsibility" and close down.

The Federal Reserve on Monday announced it will buy unlimited amounts of US Treasury debt - essentially printing money for the economy - as well as new steps to lend directly to small- and medium-sized companies that have been among the hardest-hit as economic activity dries up. "Hence investors are pinning their hope entirely on the monetary and fiscal measures which the government might take in the next few weeks", added Mr. Pathak.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul rallied up to 8 per cent. Exchanges in Europe too rallied up to 6 per cent. Rs 58 lakh crore investor wealth has eroded since its peak.

Global crude benchmark, Brent crude futures rose 5.22 per cent to Dollars 28.44 per barrel.

The number of global Covid-19 infections has shot past 3,00,000.

Besides, the Rupee's tumble continued and the currency crossed 76 a dollar for the first time yesterday and closed at 76.20 a dollar. Worldwide fatalities topped 14,000.

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