Sensex crashes 1,100-points as HMPV cases in Bengaluru spook investors
What's the story
India's stock market witnessed a major crash after the country's first Human Metapneumovirus (HMPV) cases was detected in Bengaluru. The BSE Sensex crashed by over 1,100 points while the Nifty50 index dropped by nearly 1.4%. The market reaction comes amid a virus outbreak in China and two confirmed HMPV cases in Karnataka. The fear gage index, India VIX, also spiked by 13%.
Market impact
Widespread sell-off impacts various sectors
The detection of HMPV cases has sparked a broad-based sell-off across mid and small-cap stocks, affecting several sectors. The Sensex fell to its day's low of 78,065 while the Nifty50 index slipped close to the 23,600-mark. Sectors such as metals, PSU banks, real estate, oil and gas, and financials were among the worst-hit in this market rout.
Corporate losses
Major companies witness significant declines
Major corporations such as HDFC Bank, Reliance Industries (RIL), and Kotak Mahindra Bank witnessed a major plunge in their share values. Union Bank of India saw its shares plummet by 7% while other companies such as Bank of Baroda, HPCL, BPCL, Tata Steel, Adani Energy Solutions and PNB also bore the brunt with losses of 4-5%. These corporate declines have added to the overall slump.
Official response
Health Ministry assures no cause for alarm
The Union Health Ministry has assured citizens that there is no cause for alarm. The ministry confirmed that both cases are infants and were identified through routine surveillance for multiple respiratory viral pathogens. This is part of the Indian Council of Medical Research's (ICMR) ongoing efforts to monitor respiratory illnesses across India. The ministry also plans to increase the number of laboratories testing for HMPV cases and has assigned ICMR with year-round monitoring of HMPV trends.
Market outlook
Market conditions influenced by external factors
According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the market is likely to be affected by negative factors affecting FII flows and some positive domestic factors. He said, "The external macro construct continues to be unfavorable with the dollar index at 109 and the 10-year US bond yield at 4.62%." This indicates that global economic conditions are also contributing to India's current stock market situation.