Sensex Plummets 1,500 points; 4 factors Weighing On Market...

Overseas investors pulled out a net sum of Rs 24,776.36 crore from equities and Rs 13,199.54 crore from the debt segment between Mar 2-13, depositories data showed.

Tracking sell-off in global equities, the Indian market witnessed a knee-jerk reaction on March 16 pushing Sensex and Nifty50 below crucial support levels. 

The S&P BSE Sensex broke below 33,000 levels while the Nifty50 broke below 9,500 levels.

The Indian rupee opened lower by 15 paise at 74.06 per dollar versus on Monday against Friday's close 73.91.

On the sectoral front, selling pressure was seen in realty, metals, power, public sector, and Bankex. The Nifty Bank fell nearly 5 percent or 12000 points in opening trade.

• The global trend remains weak:-

After a swift rally seen in US markets on Friday, things were looking promising for a stable Monday morning. But, Asian markets were trading weak tracking sharp selloff in Dow Futures.

U.S. stock futures plunged 4.8% to hit their down limit before daybreak in Singapore. The dollar sank more than 2% against the yen, said a Reuters report.

Australia’s benchmark stock index fell 7 percent in the first quarter-hour of the trade before paring some of the losses. New Zealand shares were down 3 percent. Japan’s Nikkei was flat and South Korea’s KOSPI was a shade weaker.

• US Fed's emergency cut spooks investors:-

The U.S. Federal Reserve and global central banks moved aggressively on Sunday to buttress a world economy unraveling rapidly amid the coronavirus pandemic, with the Fed slashing interest rates to near zero, said a Reuters report.

The US Fed slashed short-term rates to a target range of 0% to 0.25%, and announcing at least $700 billion in Treasuries and mortgage-backed securities purchases in the coming weeks.

Depository institutions may borrow from this so-called the discount window for periods as long as 90 days, pre-payable and renewable by the borrower on a daily basis.

“The Fed also said it would support U.S. banks that began to tap the capital and liquidity buffers they built up in the aftermath of the 2008 financial crisis and would reduce reserve requirement ratios to 0% effective on March 26,” said the report.

• Oil extends slide! Nears $30 a barrel:-

Crude Oil prices extended losses on Monday, slumping by more than $1 a barrel. Fall in crude oil prices suggests slowdown globally. Generally, an orderly decline in crude oil prices, which if occurs due to increased supply is beneficial for the domestic economy but in case of fears of a global slowdown, it will result in fall inequities as well.

"During the global financial crisis 2008, crude oil prices plunged nearly 70% in a span of seven months on demand concerns as the subprime crisis threatened the global economy and financial system.

"The sharp plunge in crude oil prices was mirrored in the global equities too as the common factor was the global slowdown. Thus, when it is the question of severe impact on the global economy, crude oil and wider markets can’t be seen separately," he said.

• FPIs press panic button, withdraw Rs 37,976 cr:-

Foreign portfolio investors (FPIs) have withdrawn a whopping Rs 37,976 crore on a net basis from the Indian markets in March so far amid the coronavirus pandemic triggering fears of a global recession.

Overseas investors pulled out a net sum of Rs 24,776.36 crore from equities and Rs 13,199.54 crore from the debt segment between Mar 2-13, depositories data showed.

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