How Corona Crash Hit Indian Financial Markets in March 2020 - 6 Charts - Views on News from Equitymaster

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  • Apr 2, 2020 - How Corona Crash Hit Indian Financial Markets in March 2020 - 6 Charts

How Corona Crash Hit Indian Financial Markets in March 2020 - 6 Charts

Apr 2, 2020

Stock markets around the world witnessed one of the most painful correction phases in the month of March 2020.

Indian stock markets too mirrored the trend.

Here are six charts showing how Indian financial markets performed in March 2020.

  1. Record Wealth Destruction

    In the month of March 2020, the Sensex fell as much as 23%.

    It is not the month where the market has fallen the most. That honor goes to October 2008 where markets tanked 23.9%, beating the 23.1% the market lost last month by a whisker.

    However, March 2020 wins hands down in wealth destruction.

    Wealth destruction of Rs 4.4 lakh crores back in 2008 pales in comparison to the Rs 14.6 lakh crores worth of wealth destroyed on the Sensex in the last month alone.

    March 2020 the Second Worst Month in History

  2. Huge Selling Pressure for Individual Stocks

    Except two, all the stocks in the BSE Sensex plunged in March 2020.

    The decline was mainly led by banking stocks and financial stocks.

    Stocks such as IndusInd Bank, Bajaj Finance, and Axis Bank fell as much as 40%-70%.

    Top BSE Gainers and Losers in March 2020

  3. All Sectors in a Sea of Red

    Among sectors, all the BSE indices gave negative returns in March 2020.

    BSE Realty, BSE Bankex, BSE Finance, and BSE Auto Index fell more than 30%.

    It was a double whammy for banking and finance stocks that witnessed most of the brunt on the back of coronavirus outbreak and Yes bank crisis.

    Worst Hit Sectors in March 2020

  4. Crude Oil Slumps Over 50%

    Crude oil crashed over 50% in March 2020.

    The fall was seen because of oversupply amid subdued demand.

    Oil prices crashed last month in what was the worst price dip since the 1991 Gulf War with Brent prices plunging to US$ 31 per barrel.

    Oil markets faced a double whammy from the coronavirus outbreak and a price war between Saudi Arabia and Russia after OPEC and other producers failed to agree on deeper cuts to support oil prices in early March.

    Shares of oil marketing companies such as Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL), GAIL, ONGC, Indian Oil Corporation (IOC) and Indraprastha Gas were in focus in March amid record low crude oil prices.

    They witnessed buying interest and capped most losses led by the stock market crash.

    In his latest video, Ajit Dayal shares his views on the impact of the coronavirus crisis and the oil price war on the Indian economy and the stock market. You can view the same here.

    Crude Oil Continues Free Fall

  5. Gold Prices Shine

    Base metals also remained under pressure as lockdown imposed in several parts of the world curbed demand, pushing stockpiles higher.

    However, gold prices rose 3% in March 2020 as demand for the safe haven asset rose with market participants bracing prolonged uncertainty in the wake of the novel coronavirus outbreak.

    To know more about gold, you can check one of Vijay Bhambwani's recent articles here: Is the Price of Gold About to Go Higher?

    Gold Witnesses Buying

  6. Rupee Hits Record Low in March 2020

    Massive sell-off in equities and bonds led to a huge fall in rupee against the dollar in the month of March.

    The rupee hit a record low of 76.32 against dollar earlier this week.

    Most of the selling pressure for rupee was seen on the back of slump in equities and currencies globally. Investors were concerned that support measures from governments and central banks may be insufficient to halt the economic damage caused by the coronavirus pandemic.

    Rupee Continues Downtrend

So, that was a round-up on how Indian financial markets performed in the month of March 2020.

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Monish Vora

Monish Vora is a keen student of the markets and shares his observations through his clear and concise commentary.

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Oct 27, 2020 09:06 AM