Fear of further disruption in economic activity owing to the jump in coronavirus related deaths drove the prices of safe haven assets like Gold to a record high and pushed the oil prices and global equities lower on Monday. Indian benchmark equity index, Sensex lost nearly 800 points during the afternoon trade.
Gold price’s record breaking run continued on Monday as investors sought more and more safe haven assets over increased uncertainty due to soaring Coronavirus cases. Gold futures for April delivery topped the Rs 43,000 per 10 gm mark for the first time.
“Gold`s safe haven demand may continue as concerns over more coronavirus cases outside China surge. Meanwhile, aggressive policy easing measures taken by China to shore up the economy and moderate physical market activities likely to limit major upside,” said Hareesh V., Head of Commodity at Geojit Financial Services.
South Korea and Italy raised alert due to the soaring Coronavirus cases. South Korea reported its seventh coronavirus death and 161 new confirmed cases on Monday, bringing the total number to 763.
Global oil prices reversed course over worries that the spread of virus will dent global growth. Global oil benchmark, Brent, which jumped to $60 a barrel last week following a decline in fresh cases of Coronavirus, tumbled over 3.23 per cent to $ 56.61 barrel mark on Monday.
Risky asset classes like equities traded lower across the globe as Coronavirus related death jumped past 2,600. The deadly virus has infected more than 77,000 people in China and was described by Chinese President Xi Jinping as the “largest public health emergency since the founding of the country”.
At 2.55 p.m., the Sensex traded at 40,491.46, lower by 678.66 points or 1.65 per cent. The broader Nifty slipped over 200 points to 11,867.50. Sensex had opened above the 41,000 point mark on Monday.
Nifty metal index extended losses and dragged the markets lower. The metal index fell 4.89 per cent. Jindal Steel & Power Limited lost over 8 per cent followed by JSW Steel Limited, Steel Authority of India Limited and Tata Steel Limited which lost over 6 to 9 per cent.
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Asian share indexes were also a sea of red. Korea`s KOPSI Index slipped nearly 4 per cent, Shanghai Composite Index was down 0.28 per cent. Besides, Australia`s benchmark index slid 2.2 per cent while New Zealand was about 1.3 per cent lower.