Indian bourses continued to nose-dive for the third consecutive day on Wednesday over fears of Covid-19 impacting the economy.
The Bombay Stock Exchange's Sensex crashed 1,710 points, breaching the psychologically important 29,000 level to settle at 28,869. In the last three days, the Sensex has lost over 5,500 points.
Similarly, the broader National Stock Exchange’s Nifty nose-dived by 498 points to close at 8,469 points, dropping below its resistance level at 8,500. In the last three days, Nifty has lost 1,548 points.
Covid-19 pandemic fears have taken a toll on Indian equities: the first case of the coronavirus was confirmed in India in early February this year. Just a month ago on 19 February, Sensex was at 41,323 compared to 28,869 on Wednesday.
On Monday, India’s banking regulator said that it was closely monitoring the situation and would take measures as and when needed.
Amid the slide, foreign institutional investors are dumping the Indian shares. Foreign Institutional investors have sold about $5.16 billion worth of Indian equities so far this month. Capital flight is leading to pressure on the Indian currency which is weakening against the Dollar.
Experts, meanwhile, anticipate further short-term weakness: “The positive sentiment created on Friday's (13 March) sharp upside bounce seems to have nullified. As Nifty moved below the low of 8,555 in three sessions after the bounce, this is not a positive sign and one may expect further weakness in the short term,” said Technical analyst Nagaraj Shetti of HDFC Securities.