Market Wrap: Coronavirus pandemic prompted foreign banks to buy dollars

The rupee fell against the US dollar earlier in the day making a low of 74.41, but closed on a flat note compared to yesterday's close as the global risk aversion pared the opening gains. Coronavirus pandemic prompted foreign banks to buy dollars, likely for foreign portfolio investors who may have pulled out funds from the Indian financial markets. Asian Development Bank has announced an initial package of $6.5 bln to address the "immediate needs" of its developing member countries arising from the coronavirus pandemic. The total number of Covid-19 cases in India has risen to 152. The rating agency S&P also slashed its 2020 growth forecast for India by 50 basis points to 5.2%. RBI announced Open Market Operation (OMO) purchases of Government of India dated securities. The RBI will buy up to Rs 10,000 crore of 4 Gilts via OMO purchases on March 20. The sell-off continued on the third straight session in domestic indices closing with 5.50% cut tracking global cues, while the Benchmark bond yields ended 3 bps higher at 6.30%. The GBPUSD pair has been extending its downfall and has dropped below 1.19 mark, falling to levels last seen in October 2016, as severe recession fears weighed on the pair.

The relentless selling on D-Street continued with no signs of abating as stocks across- the-board, especially the financial sector, fell like a pack of cards. The threat of economic fallout emanating from pandemic Covid-19 continued to weigh on investor sentiment. Also, rising infections in India and associated disruption in businesses led to India's GDP growth forecasts also being downgraded. At close, the Sensex was down 1709 points at 28869, while Nifty was down 425 points at 8541.

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