An across-the-board selloff swept Dalal Street, forcing equity indices to settle with deep cuts on March 6 as the Reserve Bank of India's decision to place Yes Bank under a moratorium spooked investors.
Weak global cues fanned by coronavirus fears persisted, making the situation worse. Most Asian and European markets suffered big losses as concerns over the economic fallout of the virus roiled sentiment.
Equity benchmarks the Sensex and the Nifty ended at a six-month low, while the Nifty Bank plunged to its deepest fall in five months.
At one point, the Sensex was 1,460 points down but it pared some losses and the 30-share pack closed 894 points, or 2.32 percent, lower at 37,576.62. The Nifty finished at 10,989.45, down 280 points, or 2.48 percent.
The Nifty Bank suffered a loss of 1,014 points, or 3.52 percent, closing at 27,801.45.
The BSE Midcap index closed with a loss of 2.36 percent and Smallcap index ended 1.92 percent lower.
The sell-off was triggered by a weak global trend due to coronavirus and restrictions of international travel and trade Vinod Nair, Head of Research at Geojit Financial Services, said.
The Yes Bank moratorium enlarged domestic concerns over the financial system and the Indian rupee weakened past 74 levels due to these issues, he said.
The selloff left investors poorer by Rs 3.30 lakh crore, as the market capitalisation of BSE-listed firms dropped to Rs 144.3 lakh crore on March 6 from Rs 147.6 lakh crore the previous day.
The underlying current was already weak due to rising coronavirus cases and its impact on the economy. The sentiment deteriorated further after the RBI took the control of Yes Bank and capped cash withdrawal at Rs 50,000.
"We continue to maintain our cautious view on Indian markets and expect volatility to remain high in the near-term. The updates on the spread of coronavirus cases would be the single biggest factor dictating global markets going forward. On the domestic front, updates on the resolution plan for Yes Bank along with the spread of coronavirus cases would be actively tracked by traders and investors," said Ajit Mishra, VP-Research, Religare Broking.
For the week, the Sensex lost 721 points, or nearly 2 percent, while the Nifty retreated 212 points or nearly 2 percent.
Top Nifty gainers: Bajaj Auto, GAIL, Maruti Suzuki
Top Nifty losers: Yes Bank, Tata Motors, Zee Entertainment
Stocks & Sectors
All sectoral indices closed with major losses. With a loss of 4.40 percent, BSE Metal emerged as the top loser. BSE Bankex and Finance lost 3.46 percent and 3.39 percent, respectively.
As many as 607 stocks, including IndusInd Bank, ITC, Larsen & Toubro and ONGC, plumbed to 52-week lows on BSE.
Around 384 stocks, including Corporation Bank, DHFL, Vakrangee, Indiabulls Real Estate, Adani Green Energy and Indiabulls Integrated Services, hit lower circuit.
A volume spike of 100-200 percent was seen in stocks such as Max Financial Services, IndusInd Bank, SRF, RBL Bank, Just Dial and Mahindra & Mahindra Financial Services.
Long build-up was seen in stocks like Pidilite Industries, Mindtree and Bajaj Auto.
Stocks like Yes Bank, RBL Bank and Max Financial Services saw short build-up.
Stocks in news
YES Bank: The share price plunged 56 percent after the private lender was placed under moratorium, restricting withdrawals to Rs 50,000.
SBI: The stock fell over 6 percent following reports that the state lender would pick up a stake in Yes Bank. According to CNBC-TV18 sources, SBI and LIC are likely to each pick up 24.5 percent stake in Yes Bank and appoint a new MD for the beleaguered company and get the board control.
Tata Motors: The share plunged more than 9 percent after it announced a drop in China sales due to coronavirus. The coronavirus significantly impacted China sales, with February retail down around 85 percent against the previous year, the company said in a release.
Aviation stocks: Aviation stocks, including those of IndiGo owner Interglobe Aviation and SpiceJet fell 3-9 percent as coronavirus fears intensified.
Metal stocks: Most metal stocks cracked as coronavirus cases continued to grow in the US, Europe and West Asia, making investors worried about global growth.
Technical View
The Nifty broke crucial support at 11,000 and also its four-day consolidation range of 11,030-11,433.
It closed below the psychologically important 11,000- mark but formed a bullish candle on the daily charts as the closing was higher than the opening levels.
The weakness after four-day rangebound trade indicated that the bears could remain in control of the index, though there was recovery from the day's low of around 10,800, which could be crucial support going forward, experts say.
Three levels to watch on March 9 would be 10,800, 10,833, 11,031
Max Call OI: 11,500, 11,800
Max Put OI: 11,000, 10,500
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