Indian shares gave up early gains to settle lower for a seventh straight session on Monday, rocked by fears the coronavirus would develop into a pandemic after the country reported two fresh cases.
One of the new cases was detected in the capital New Delhi, and the other in the southern state of Telangana, the government said in a statement on Monday, triggering a selloff in the domestic markets.
The two patients, who had travelled to Italy and Dubai in the United Arab Emirates, respectively, are stable and being closely monitored, the government said.
"The government is monitoring the situation at the highest level," India's Health Minister Harsh Vardhan said at a press conference on Monday afternoon.
The benchmark S&P BSE Sensex and NSE Nifty 50 index dropped up to 1.3% and 1.5%, respectively, following reports of the fresh cases.
The Nifty settled down 0.62% at 11,132.75, while the Sensex closed 0.4% lower at 38,144.02. The Indian rupee slipped to 72.44 against the dollar at the day's low.
Indian equities had rallied as much as 2.1% earlier in the session on hopes that major central banks would take steps to stabilise financial markets amid the coronavirus epidemic.
"Today's relief rally was short-lived as investor confidence got a jolt after news of the new cases," Saurabh Jain, assistant vice-president of research, SMC Global Securities.
Monday's rocky trading session followed a massive sell-off last week that saw more than $5 trillion being wiped out from global share value. This prompted financial markets to price in policy responses from the US Federal Reserve, the Bank of Japan and the Reserve Bank of Australia.
Global stocks rebounded on Monday as hopes for interest rate cuts to soften the economic blow of the epidemic steadied nerves and drove US Treasury yields close to 1%.
In Mumbai, top lender State Bank of India was the biggest drag, falling 5.2% to its lowest close in more than four months.
Conglomerate Larsen & Toubro Ltd dropped 2.2% to its lowest close since October 2017.
Yes Bank Ltd, down 8.8%, was the top loser in the Nifty 50.