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Sensex tumbles over 240 points to 41,330.45, Nifty falls 89 points in opening session; Rupee opens sharply lower

FP Staff

Market benchmark Sensex tumbled over 240 points in opening session on Monday tracking losses in index-heavyweights HDFC duo, Kotak Bank and Reliance Industries amid weak global cues.

The 30-share BSE index was trading 240.72 points or 0.58 percent lower at 41,372.47. Similarly, the broader NSE was trading 76.70 points, or 0.63 percent, down at 12,171.55. In the previous session, Sensex settled 226.79 points, or 0.55 percent, higher at 41,613.19, and Nifty closed 67.90 points, or 0.56 percent, up at 12,248.25.

Top losers in the Sensex pack included Tata Steel, Kotak Bank, HDFC twins, Hero Motocorp, SBI and Tech Mahindra.

On the other hand, UltraTech Cement, ICICI Bank, M&M, Titan and NTPC were trading on a positive note.

According to analysts, global investors increasingly turned nervous as fears over the global economic impact of the deadly China virus extended last week's selloff.

On the domestic front, analysts expect the cautious trend to continue in the near-term since a lot has been factored in the market about budget wish list and expectation of revival in earnings growth, but the actual Q3 results have been below par.

Bourses in Japan were trading with sharp losses, while markets in China, Korea and Hong Kong were closed for a holiday.

Brent crude oil futures fell 2.08 per cent to USD 59.43 per barrel.

Rupee opens 18 paise lower

The rupee opened on a weak note and declined by 18 paise to 71.51 against the US dollar in opening trade on Monday, tracking weak opening in domestic equities and strengthening of the American currency overseas.

Forex traders said weak opening in domestic equities dragged the local unit while easing crude prices and foreign fund inflows supported the rupee and restricted the downfall.

The rupee opened weak at 71.51 at the interbank forex market, down 18 paise over its previous close.

The domestic currency, however, gained some lost ground and was quoted at 71.44 against US dollar at 1002 hrs.

The rupee had settled at 71.33 against the US dollar on Friday.

Brent crude futures, the global oil benchmark, fell 2.14 percent to $59.39 per barrel, amid expected demand slump over rising Coronavirus cases in China.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 659.11 crore on Friday, as per provisional data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.02 percent to 97.87.

The 10-year government bond yield was at 6.56 percent in morning trade.

Shares, oil slide as China virus fears intensify

Stocks tumbled on Monday as investors grew increasingly anxious about the economic impact of China's spreading virus outbreak, with demand spiking for safe-haven assets such as the Japanese yen and Treasury notes, according to Reuters.

Japan's Nikkei average .N225 suffered a steep 1.8 percent loss, on track for the biggest one-day fall in three weeks.

US S&P 500 mini futures ESc1 was last down 0.9 percent, having fallen 1.3 percent in early Asian trade.

"All you see is headlines about the coronavirus, giving investors a reason to sell the markets," said Takeo Kamai, head of executions services at CLSA in Tokyo.

The ability of the coronavirus to spread is getting stronger and infections could continue to rise, China's National Health Commission said on Sunday, with more than 2,700 people globally infected and 80 in China killed by the disease.

China announced it will extend the week-long Lunar New Year holiday by three days to 2 February and schools will return from their break later than usual. Chinese-ruled Hong Kong said it would ban entry to people who have visited Hubei province in the past 14 days.

Market participants kept a wary eye on developments around the virus, which the World Health Organization (WHO) last week deemed "an emergency in China," but not, as yet, for the rest of the world.

MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.2 percent, although trade in the region has already slowed for the Lunar New Year and other holidays, with financial markets in China, Hong Kong and Australia closed on Monday.

All three major Wall Street indexes closed sharply lower on Friday, with the S&P 500 seeing its biggest one-day percentage drop in over three months.

The S&P 500 lost 0.9 percent, the Dow Jones Industrial Average fell 0.6 percent and the Nasdaq Composite shed 0.9 percent after the Centers for Disease Control and Prevention confirmed a second case of the virus on US soil.

US Treasury prices advanced, pushing down yields further, with the benchmark 10-year notes dropping to a 3-1/2-month trough of 1.627 percent in early Asian trade.

In the currency market, the concerns about the virus supported the yen, often perceived as a safe haven because of Japan's net creditor status.

The Japanese currency strengthened as much as 0.5% to 108.73 yen per dollar, its 2-1/2-week high.

The euro last stood at $1.1033 versus the dollar, having fallen to its eight-week low of $1.1019 on Friday.

The offshore yuan dropped more than 0.3% to 6.9625 against the dollar, its weakest level since 8 January.

The heightened fears of the economic impact of the coronavirus also pressured oil and other commodity prices, except safe-haven gold.

U.S. West Texas Intermediate (WTI) crude futures plummeted more than 3 percent to hit a 3-1/2-month low of $52.15 in early trade.

"Investors will react quickly to any sign of negativity and this is no exception as China announces that the issue has become an emergency. This could keep oil prices fragile until the coronavirus shows signs of slowing down," said Mihir Kapadia, chief executive at Sun Global Investments.

--With inputs from agencies

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