The Bombay Stock Exchange building in Mumbai. Photo: AFP
The Bombay Stock Exchange building in Mumbai. Photo: AFP

The coronavirus pandemic’s tightening grip on India is taking a heavy toll on its stock markets. Both the Bombay Stock Exchange and the National Stock Exchange have been bearish for most of this month, and on Monday they suffered their biggest ever loss.

The Bombay Stock Exchange index fell 3,934 points and the National Stock Exchange index Nifty fell 3,299 points as stocks across the board faced selling pressure.

The number of confirmed coronavirus cases have been rising steadily in India and crossed 400 on Monday. In order to contain its spread, various states in the country have imposed lockdowns to prevent the spread of the virus. The federal government has already halted trains and flights.

As a result, over the weekend many companies, notably auto companies, have shut operations due to supply chain disruption and restrictions on the movement of people.

With Monday’s fall, investors lost 13.88 trillion rupees (US$ 181 billion), while in the last month investors have lost Rs 56.22 trillion ($ 736 billion).

The market overwhelmingly favored the bears. Out of 2,401 stocks traded on the Bombay Stock Exchange, 233 advanced and 2,036 declined while 132 remained unchanged.

Financial stocks led the rout in Indian markets on Monday. HDFC Bank slumped 13%, ICICI Bank 18%, IndusInd Bank 23%, Bajaj Finance 24% and Axis Bank 28%.

The auto sector also took a severe beating as companies halted production across the board. Bajaj Auto shares tanked 14% while leading carmaker Maruti Suzuki’s shares slumped 17%.

In the National Stock Exchange, the Nifty Private Bank index suffered the biggest fall (17%), followed by Nifty Bank (16%) and Nifty Auto (14%).

The global cues were also not favorable with the coronavirus pandemic triggering fears of a global recession. In an attempt to stem the spread of the virus, governments the world over have been imposing flight curbs and other measures to restrict the movement of people. This has led to an acute contraction of travel and industrial activity. Globally, these restrictions have induced volatility in the Asian, European and US stock markets.

The aviation industry has been the worst hit by travel curbs and this has led to a fall in crude oil prices as the demand for fuel has come down drastically. According to consultancy firm CAPA (Centre for Aviation), by May-end most of the WORLD’S airlines will go bankrupt. It has called for coordinated action by governments to address the crisis.