Sensex erases early gains, drops 350 points on virus fears

NEW DELHI: The domestic equity indices failed to sustain their opening gains in Friday's session as the bears took the control back on Dalal Street amid rapidly rising coronavirus cases in India.

Prime Minister Narendra Modi has asked citizens to observe a ‘janata curfew’ on Sunday as preparation for future, hinting India could also enforce a complete shutdown as situation worsens.

BSE flagship Sensex dipped over 350 points to 27,932 while NSE benchmark Nifty fell 39 points to 8,224. Broader market indices were faring in-line with their headline peers as Nifty Smallcap slipped 0.37 per cent while Nifty Midcap was flat. Nifty 500 was down 0.40 per cent.

Volatility will be a norm on the Street, analysts said. “If we do not see any light at the end of the tunnel then you are likely to see continued volatility which means more up days and more down days,” said Hugh Albert Johnson of Hugh Johnson Advisors.

India VIX, the measure of volatility in the market, gained 0.94 per cent to trade around 12-year record levels of 72.87.

In the 30-share pack Sensex, bank and financials were the worst performers. HDFC Bank, IndusInd Bank, ICICI Bank dipped 1-5 per cent. HDFC was also down 4.68 per cent to Rs 852.95.

ONGC was the biggest gainer, up 5 per cent to Rs 64.15. ITC, HUL and Power Grid were among other major gainers on the index, adding over 4 per cent each.

Globally, MSCI's broadest index of Asia-Pacific shares outside Japan rose 3.2 per cent, after seven sessions of losses. For now, investors in Asia were merely happy Wall Street had not plunged again and South Korean shares bounced 3.5 per cent, though that still left them down 14 per cent for the week.

Australia's beleaguered market gained 4.2 per cent, and futures for Japan's Nikkei were trading up at 17,435, compared to a cash close of 16,552.

E-Mini futures for the S&P 500 eased 1.2 per cent, perhaps unsettled by news California' governor had issued a statewide "stay at home" order to residents.