Monday blues for the markets!

A lot has happened over the weekend, the ‘Janta Curfew’ amidst clapping & applauding at 5 pm to thank the emergency workers who are performing their duties amid the risky situation. Certainly, the nation-wide clapping of hands became once in a lifetime experience. However, coming back to markets, SEBI released its guidelines to control volatility in the markets, by initiating restrictions on short-selling. The history suggests that these kinds of measures further dampen the market sentiment. In the year 2001, when SEBI banned short-selling, Nifty fell more than its pre-ban period. And, at this moment as well, SGX Nifty is indicating that we are heading for a big crash in the opening bell as SGX Nifty is trading with a mammoth four digit losses or 11.88 per cent down at 7,733. Nifty may start the week with a lower circuit and if it does, a 45-minute trading halt will follow before trading resumes.  

Majority of Asian markets were witnessing a bloodbath this morning following steep losses in US markets. Hong Kong’s Hang Seng has dropped 4.30 per cent and China’s Shanghai Composite is lower by 2.07 per cent. Meanwhile, Japan’s Nikkei 225 was up by 0.79 per cent.

Back home, the markets ended the last trading session of the week on a positive note. Nifty jumped 5.83 per cent and BSE Sensex rallied 5.75 per cent. In broader markets, Nifty Mid-cap and Small-cap rose by 4.79 and 2.08 per cent, respectively. All the sectoral indices ended in green. Wherein, Nifty FMCG advanced the most followed by Nifty IT.  India VIX has dropped 7 per cent to 67-mark.

On Friday, US markets tumbled as the market participants feared that COVID-19 may push US and other big economies into a major recession. Further, action taken by the governments and central bank to mitigate damages of pandemic outbreak is not enough to revive the economy.  Dow plummeted 4.6 per cent, S&P 500 index fell 4.3 per cent and the tech-heavy Nasdaq shed 3.8 per cent. On the weekly basis, Dow Jones ended its worst week since 2008 as the index plunged 17.3 per cent loss. Meanwhile, European indices ended the day in green.