Last week was the absolute carnage for equities across the globe. India’s equity markets too witnessed a broad based selling that led benchmark indices to drop multi-year low.
However, some pullback was seen led by short covering. Indian stock markets rebounded strongly Friday to finish 6% higher, driven by gains in IT stocks.
Global markets also made a partial comeback from a rout as policymakers across the world launched fresh efforts to stem the economic fallout of the coronavirus pandemic.
The Sensex settled 5.75% or 1,627 points higher at 29,915, the most in a single session since May 2009. But on a weekly basis, the Sensex slumped 12%, its worst week in over 10 years.
The broader Nifty closed up 5.83% at 8,745. Both Nifty and Sensex logged their worst week since 2008.
Central banks in Europe, Japan, Australia and the US have announced new stimulus to help businesses battered by a near halt in economic activity due to the Coronavirus breakout.
Coronavirus has become a black swan event which is resulting in both life and financial crisis and this is the main reason for the steepest fall in the market.
In the coming week, investors will continue to focus on the spread of Coronavirus and the lockdowns announcement in the US.
Apparently, markets are set to face more violent swings.
Also, the SEBI new rule on market wide position limit takes effect on Monday, which intends to clamp down Wilde swing in stock price, may hold participants on the edge.