Sensex tanks 1,011.29 points, Nifty plunges below 9000; Dr Reddy’s Labs, Bharti Infratel, Bharti Airtel major gainers

New Delhi: Equity benchmark indices fell on Tuesday (April 21) after crude futures prices went into negative territory for the first time. The Sensex closed 1,011.29 points down or 3.20% at 30636.71, while the broader Nifty was also down 280.40 points or 3.03% at 8981.45. 

Major gainers on the Nifty included Dr Reddy’s Labs, Bharti Infratel, Bharti Airtel, and Hero MotoCorp while IndusInd Bank, Bajaj Finance, ICICI Bank, and Hindalco Industries and Zee Entertainment were among top losers.

During early hours today, equity benchmark indices slipped by 2.7 per cent in line with Asian peers after US oil prices slipped below zero dollar a barrel in overnight trade. US crude futures turned negative for the first time in history following a collapse in oil demand as the coronavirus pandemic derails the global economy.

At 10:15 am, the BSE Sensex was down by 870 points or 2.75 per cent at 30,778 while the Nifty 50 edged lower by 248 points or 2.69 per cent at 9,013. Except for Nifty pharma and FMCG, all sectoral indices at the National Stock Exchange were in the red with Nifty metal down by 5.2 per cent, auto by 5.1 per cent and private bank by 4.3 per cent.

Among stocks, Reliance Industries fell by 3.93 per cent to Rs 1,195.60 per share, while metal majors Hindalco dropped by 8.9 per cent at Rs 106.10 per share while Tata Steel lost by 7.1 per cent and Vedanta by 6.6 per cent. Auto major Maruti skidded by 6.8 per cent to Rs 4,964.70 per share and Tata Motors by 5.2 per cent. Private lenders IndusInd Bank, Axis Bank and ICICI Bank dipped by 6.7 per cent, 6.1 per cent and 5.8 per cent respectively. The stocks that gained were Dr Reddy, Cipla, Nestle India, Hindustan Lever and ITC.

Meanwhile, Asia shares were in the negative zone after an overnight tumble at Wall Street with US crude futures turned negative for the first time in history. However, it bounced back into positive territory this morning. MSCI`s broadest index of Asia Pacific shares outside Japan fell half a per cent. 

Japan`s Nikkei fell by 2.26 per cent while Hong Kong`s Hang Seng lost by 2.38 per cent and South Korea`s Kospi slipped by 1.67 per cent.Overnight stateside, the Dow Jones Industrial Average closed 592 points lower at 23,650, the S&P 500 slipped by 1.8 per cent to end its trading day at 2,823 and the Nasdaq Composite pulled back 1 per cent to close at 8,561. 

Shanghai sank 0.9 per cent while Seoul was down a similar amount and Taipei retreated 2.8 per cent. Singapore, Jakarta and Bangkok lost more than one percent, and there were also big losses in Wellington and Manila.

In early trade, London, Paris and Frankfurt tumbled. The losses came despite signs that the virus, which has infected almost 2.5 million people and killed 170,000, is easing as global lockdowns begin to take effect, allowing some countries to slowly return to normality.

However, US crude prices bounced back into positive territory on Tuesday, a day after crashing below USD 0.00 for the first time owing to crippled demand and a storage glut, while the commodity rout sent equities sharply lower. Investors were also tracking developments in North Korea following US reports that Kim Jong Un had undergone cardiovascular surgery earlier this month and was in "grave danger".

West Texas Intermediate for May delivery rose to USD 1.10 a barrel after diving to an unprecedented low of -USD 37.63 in New York as the pandemic brings the global economy, transport and factory activity to a halt. However, it later eased back to sit 30 cents higher.

The sell-off in May futures came because the contract expires later Tuesday, meaning traders needed to find buyers to take physical possession of the oil -- a job made near-impossible as storage becomes scarce. However, focus is now on the June contract, which had trading volumes more than 30 times higher. That rose towards USD21 a barrel, from USD20.43 on Monday.

Brent crude, the international benchmark, was changing hands at USD23.87 for June delivery, down from Monday.

Oil markets have been ravaged this year after the pandemic was compounded by a price war between Saudi Arabia and Russia.
While the two have drawn a line under the dispute and agreed with other top producers to slash output by almost 10 million barrels a day, that is not enough to offset the lack of demand.

The flight to safety was reflected in currency markets, where the dollar soared against high-yielding, riskier units. The Australian and New Zealand dollars and Russian ruble were all down more than one percent, while the Indonesian rupiah sank 0.9 percent.

(With Agency Inputs)