NEW DELHI: Indian stock markets followed their global peers in officially wading into bear market territory on Thursday after the World Health Organisation's (WHO) officially classified the ongoing Covid-19 outbreak as a pandemic. The BSE Sensex and NSE Nifty had both crashed a staggering 8 per cent, with all sector-based indices crashing from between 4-10 per cent.
The Sensex ended 32,778.14 points lower, losing a whopping 2,919.26 points, while the broader Nifty closed at around 9,590.15 points after having shaved off over 868.25 points during the day's trade. These are levels the two indices have not breached on the lower side since late 2017 and early 2018.
The market panic stems from the sharp escalation in the spread of the Covid-19 pandemic and subsequent containment measures announced by the world's major economies, including the United States, India and several European nations.
In fact, United States President Donald Trump's decision to announce a 30-day ban on all travel from Europe to the US and India announcing the suspension of all visas until April 15 triggered investor panic as the scale of the disruption seems likely to be a lot larger than earlier expected.
The steadily increasing restrictions on both international and domestic travel has confirmed that the world economy is set to receive a huge dent in growth over the current and subsequent quarters due to a steep projected decline in demand for products across the board.
"To keep new cases from entering our shores, we will be suspending all travel from Europe. The new rules will go into effect Friday at midnight," Trump said adding that the European Union had "failed to take the same precautions" as the US government to contain the outbreak.
"This is not a financial crisis. This is just a temporary moment in time that we will overcome as a nation and a world," Trump said.
Global stocks and oil plunged immediately after Trump's announcement, triggering a flurry of panic selling. Dow futures plunged more than 1,100 points, or 4.73 per cent, while the S&P 500 futures fell 4.6 per cent and Nasdaq futures were down 5 per cent. Eastern markets like Japan's Nikkei and Australia's S&P/ASX 200 also opened to a large scale rout, losing down more than 4 per cent in value.
The developments also sent oil prices falling after a brief recovery, with Brent crude oil losing as much as four per cent in value on during Thursday's trade to stand at $34.36 a barrel. Oil prices have also been weakened by the newly kicked-off price war between OPEC producers like Saudi Arabia and the UAE on one side and Russia on the other.
Among the worst-performing segments on the Indian bourses were, unsurprisingly, those related to travel and upstream oil and gas production. Indian airline stocks opened deep in the red, with SpiceJet scrip slumping over 18 per cent and Indigo by over 10 per cent.