The Indian stock market entered bear territory and the blue-chip Nifty 50 slipped below the 10,000 mark for the first time in two years on Thursday, as the coronavirus outbreak was declared a pandemic and the United States suspended travel from Europe.
The NSE Nifty 50 index slid 5.2% to 9,916.55 in early trading, while the benchmark S&P BSE Sensex dropped 5.1% to 33,876.13.
The Nifty 50 briefly entered bear territory on Thursday – a 20% fall from its most recent peak in January.
The rupee weakened as much as 0.8% to 74.35 against the dollar, its weakest level since October 2018, while the benchmark 10-year bond yield ticked up to 6.15%.
“The very fact that the WHO (World Health Organization) has called the outbreak a pandemic is a cause for worry for investors, especially since this comes against a backdrop of a slowing Indian economy,” said Gaurav Dua, head of capital market strategy at Sharekhan.
U.S. President Donald Trump stunned markets as he announced the suspension of all travel to the United States from Europe, except from the United Kingdom, for 30 days starting Friday in an effort to contain the spread of the virus.
Stock markets around the world crumbled after Trump’s move, with U.S. stock index futures diving 4.7% and MSCI’s broadest index of Asia-Pacific shares outside Japan tumbling 4.1% to its lowest level since early 2019.
India said on Wednesday it will suspend a vast majority of visas to the country to contain the virus, as cases across the region continued to rise.
The WHO declared the new coronavirus as a pandemic for the first time on Wednesday, adding that Italy and Iran were now on the frontline of the disease and other countries would soon join them.
All stocks on the blue-chip indexes in Mumbai were trading in the red, dragged down most by large-cap energy and financial shares.
Oil-to-retail conglomerate Reliance Industries Ltd caused the biggest damage to the indexes, falling as much as 9.1% to an over 16-month low.
Top private-sector lender HDFC Bank Ltd slid 5.5% to its lowest since March 2019.
Interglobe Aviation Ltd, parent of India’s biggest airline IndiGo, dropped 10% after it said on Wednesday profit for the March quarter could be hit due to the virus outbreak.