Sensex closes 581 points lower, Nifty at 8,269 amid rising COVID-19 cases in India

Sensex and Nifty turned closed 2% lower on Thursday, tracking trend from overseas amid fears of economic fallout from the coronavirus outbreak. Extending decline for the fourth straight session, Sensex closed 581 points lower at 28,288 and Nifty fell 205 points to end at 8,263.

With major declines today, all the sector-based indices ended in red, with 5-4% drop in metal, auto and media, followed by 3% fall in realty and around 2% fall in banking scrips.

Sensex has hit a fresh 52-week low of 26,714. Similarly, NSE Nifty too touched a new one-year low of 7,832.55 as against the earlier hit of 8,407.05.

Sustained foreign fund outflows further dampened the sentiment, traders said. Tracking volatility, the Indian rupee fell to a record low 75.11 mark, losing 85 paise against the dollar today.

Vinod Nair, Head of Research at Geojit Financial Services said, "After another volatile session of trade, in which the Nifty fell below the 8,000 mark, benchmark indices closed lower by around 2.4%. The market failed to take early cues from positive opening in the European markets after ECB rolled out another stimulus package. With worries about a case of community spread of the virus, investors fear further impact from Covid-19 and preferred cash instead of investments. All asset classes are seeing downward pressure. FIIs have also been net sellers to the tune of Rs 40,000 crore this month, putting pressure on the market. However, pockets of value buying in quality stocks were seen during the session."

Sensex and Nifty have lost over 17% in the last 4 days of freefall as domestic investors fretted over the sharp rise in coronavirus cases in the country and their impact on the economy. Overall, Rs 7 lakh crore worth of investor wealth has been lost in today's trade.

In the afternoon session, indices reversed trend following a positive opening in European market that cooled off some losses in US futures too.

European indices opened in green after European Central Bank's (ECB) on Wednesday joined other central banks and announced a surprise EUR 750-billion scheme to purchase government and corporate bonds. Although hopes from stimulus gave only brief solace as markets worldwide continued the bearish trend.

Ajit Mishra, VP - Research, Religare Broking said,"It was a roller coaster ride for the benchmark indices on Thursday as they hovered in a broader range and finally settled with a cut of over 2%. Though it recovered strongly in the middle, the decline in the latter part of the session again pushed the index in the red. We might see Nifty finding some solace around 7600 however it could be a temporary relief, citing the prevailing negative sentiment."

A massive global selloff has been triggered in the recent weeks over fears of recession as number of coronavirus cases spread. According to market experts, near panic conditions in the financial markets are likely to continue over the next few weeks, keeping it volatile and mostly in red territory.

NSE Nifty had hit its lifetime high of 12,430 on January 12, 2020. From there the index has fallen 36.9% to the new low of 7,832.55 in mere two months.

On a similar note, Sensex has declined 31% or 12,979 points from the beginning of the year and  Nifty has lost 32% or 4,058 points.

In one month, Sensex and Nifty have fallen 32% and 30%, respectively. Over the last week, BSE and NSE indices have fallen 13% and 14%.

The number of global Covid-19 infections has shot past 2,00,000. Worldwide fatalities topped 8,000. Cases in India rose to 169 on Thursday after 18 fresh cases were reported from various parts of the country, according to the Health Ministry.

On near term outlook of Nifty, Amit Shah, Technical Research Analyst with Indiabulls Securities said,"Only a close above 8,700 would be first sign of strength for the Nifty and any further recovery is likely to materilaze only on a close above the mentioned resistance zone.

"7,800 is the near term support," he added, quoting support around 8,100-7,800 level and resistances at 8,600-8,700.

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