March mayhem: FIIs log record outflows as Sensex, Nifty post worst show ever
Aseem Thapliyal April 2, 2020
Foreign institutional investors (FIIs) logged the worst sell-off ever in Indian market last month with equity markets witnessing record losses due to rising number of coronavirus cases in India and the world. FIIs withdrew Rs 65,816 crore in a month which proved to be the worst ever for Sensex and Nifty.
During the same period, domestic institutional investors (DIIs) purchased equities worth Rs 55,595 crore to minimise the impact of carnage on Indian indices. When FIIs were leaving Indian markets, DIIs such as LIC, public sector insurers and PSUs among others were infusing funds into equities to cap losses in Sensex and Nifty.
While Sensex lost 8,829 points or 23.05%, Nifty fell 2,604 points or 23.24% in March.
March 2020 will not only be remembered in the history of Indian market for the record losses in Indian indices and massive FII outflows but also for the trading halts led by high volatility which occured after 12 years.
Indian market hit circuit breaker twice In March amid deep selling pressure across the globe on rising number of coronavirus cases and the resulting economic contagion sweeping the world.
On March 13, Nifty hit lower circuit of 10% in early trade and trading was halted on BSE and NSE for 45 minutes. Nifty, which hit the circuit breaker of 10% plunged 966 points to 8,625.
Similarly, Sensex plunged 3,090 points or 9.43%. To counter the historic fall, DIIs infused Rs 5,867 crore into Indian equities. After trading began, Sensex and Nifty logged their biggest intra day recovery. While, Sensex gained 5,431 points from its intra-day low of 29,388, Nifty zoomed 1,604 points from day's low of 8,555.With DIIs recording their largest fund infusion in March, Sensex closed 1,325 points or 4.04% higher at 34,103 after a 3,390 points fall intra day in the same session.
In the second instance of Indian markets hitting circuit breaker, Sensex hit circuit breaker of 10% on March 23. The index lost 2,991 points or 10% which led to the triggering of circuit breaker on BSE and NSE at 9:58 am. Nifty too declined 9.40% or 822 points to 7,923 in early trade.In the same session, benchmark indices logged their biggest losses ever in their history. While Sensex lost 3,934 points at 25,981, Nifty closed 1,135 points lower at 7,610.
After the catastrophic month of March, FIIs sold equities worth Rs 1116.7 crore on April 1. However, DIIs started April on a negative note. They sold equities worth Rs 450.36 crore yesterday when Sensex and Nifty plummeted over 4% each in line with a global selloff as investors fretted over the impact of prolonged worldwide lockdowns due to the Covid-19 pandemic.
While Sensex closed 4.08 per cent lower at 28,265.31, Nifty tanked 343.95 points, or 4 per cent, to close at 8,253.80. Investor wealth eroded by Rs 3.2 lakh crore on rising fears that global economy was heading into recession on rising number of coronavirus cases.