Indian equity benchmark indices BSE Sensex and Nifty 50 witnessed sharp selling on Monday, with all sectoral indices flashing in the red, impacted by the negative factors such as sustained foreign fund outflows, unfavourable macro numbers, and weak global cues. The sell-off in the market was also triggered by the detection of Human Metapneumovirus (HMPV) cases in India, which are reportedly spreading fast in northern China, particularly among children. HMPV is a respiratory disease that causes flu or cold-like symptoms, and has been around since 2001 when it was first detected in the Netherlands. 

Early today, the 30-share Sensex opened marginally higher by 58 points at 79,282, and the NSE Nifty belled the day at 24,046, up 41 points over Friday’s closing level. The equity benchmarks soon lost momentum, tracking weak cues from global peers, and declined up 1.9% intraday.

During the session, the Sensex slipped as much as 1,441 points, or 1.8%, to hit an intraday low of 77,782. In a similar trend, the Nifty50 plummeted 453 points, or 1.88%, to touch a day’s low of 23,552. Finally, the Sensex ended 1.6% lower at 77,965, and the Nifty closed down by 1.62% at 23,616.

The market witnessed broad-based selling, with the BSE Midcap and Smallcap falling up to 2.4%. India's risk gauge, the India VIX index, spiked 15%, indicating an increase in market volatility and higher uncertainty or risk in the near future.

“The Indian equity markets are witnessing a sharp decline today, with both Nifty and Bank Nifty slipping below their 200-day moving averages (DMA). The sell-off can be attributed to a rise in foreign institutional investor (FII) selling and concerns surrounding the upcoming Q3 earnings season. Additionally, fears related to the new HMPV virus have added to the bearish sentiment, triggering fresh rounds of selling after the recent counter-trend pullback rally,” says Santosh Meena, Head of Research, Swastika Investmart.

On the market outlook, Meena says the overall market structure appears weak; however, there remains a glimmer of hope for the bulls. “One key factor is the lack of consistent follow-through in either direction, suggesting a degree of indecision. Furthermore, both Nifty and Bank Nifty are currently trading near their crucial support levels of 23,500 and 49,700, respectively, which could provide some respite to the bulls.”

On the global front, Japanese markets were the worst performers, with Nikkei 225 index sliding up to 1.5% as market reopened after the New Year holidays.  China’s Shanghai Composite index and Hong Kong’s Hang Seng index dropped up to 0.4%. On the other hand, South Korea’s KOSPI jumped up to 2%, while Australia’s ASX 200 was marginally up by 0.1%. On Friday, Wall Street ended higher, snapping a five-day losing streak, aided by fresh demand for big tech stocks.

Among individual stocks, FMCG heavyweight ITC ended 2.25% after the new share price of the company was discovered following the demerger of ITC Hotels. The new share price of ITC ex-ITC Hotels was adjusted by ₹26 or 5.4% at ₹455.60 on NSE and by ₹27 or 5.6% at ₹455 on BSE.

India has reported two cases of HMPV, with two infants infecting with the virus in Karnataka’s Bengaluru, as per the Union Health Ministry. One case is also suspected in Gujarat. “It is emphasised that HMPV is already in circulation globally, including in India, and cases of respiratory illnesses associated with HMPV have been reported in various countries. Furthermore, based on current data from ICMR and the Integrated Disease Surveillance Programme (IDSP) network, there has been no unusual surge in Influenza-Like Illness (ILI) or Severe Acute Respiratory Illness (SARI) cases in the country,” the ministry said in a release.

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