NEW DELHI -- Nonessential businesses across India shuttered their operations on Monday until the end of March on government orders to battle the spread of novel coronavirus, sending stocks tumbling more than 13%.
Manufacturing industries in major cities -- including automobiles, smartphones and home appliances -- suspended production, dealing a fresh blow to the economy that grew at a sluggish rate of 4.7% in the October-December quarter.
BSE SENSEX, India's leading stock index, fell 13.15% to close at 25,981.24 points. After hitting a record high of about 42,000 mid-January, the index has lost nearly 40% and is now dwelling at its end-2016 level as the coronavirus pandemic became increasingly serious in the country. By Monday, India had 467 confirmed coronavirus cases and eight deaths.
Trading on the board was halted on Monday morning for 45 minutes after the index fell 10%. It was the second time in over a week that trade in Indian markets was halted temporarily.
Only essential services are now allowed to operate in the country's coronavirus-hit regions. All passenger trains, subways and buses have ceased operation until the end of March.
"We estimate that the lockdown could hit [India's] first quarter 2020 GDP to the tune of $6.5 billion to $7 billion. The key sources of drag would be manufacturing and consumer spending on services," Oxford Economics said in a note released on Monday. "We now expect first quarter GDP growth to slow to around 3% [year-on-year] from our earlier estimate of 4.3%."
"The company will shut production and office operations at its facilities in Gurugram and Manesar in [the northern state of] Haryana with immediate effect until further notice," India's top-selling passenger carmaker Maruti said in a statement.
Sport utility vehicle manufacturer Mahindra said in a filing to the stock exchange that it was suspending production at its plants in Nagpur, Pune and Mumbai in western Maharashtra state, while the local unit of South Korea's biggest automaker Hyundai Motor stopped operation in the southern city of Chennai.
The production of motorcycles has also been hit. India is the world's largest motorcycle market. Hero MotoCorp, the world's largest motorcyle manufacturer, has halted operations at all its manufacturing facilities, including in India, Colombia and Bangladesh until March 31.
Honda Motorcycle & Scooter India also announced a temporary shutdown of operations at all of its four manufacturing plants across the country.
Along with the automobile industry, other businesses also halted operations.
According to local English-language newspaper Economic Times, consumer electronics companies, smartphone and appliance manufacturers, including Samsung Electronics, LG Electronics, Godrej Appliances, Haier, Panasonic Corp. and Carrier Midea, have shut factories, either until March 25 or to the end of the month.
The Confederation of All India Traders said all commercial markets in New Delhi will be closed until the end of March in response to a request from the local administration. "More than three million employees will remain at home," Secretary General Praveen Khandelwal said in a statement that also advised traders not to cut wages.
In Mumbai, the country's financial center, only grocery stores, pharmacies, petrol pumps and other essential services like hospitals remain open.
As all nonessential retailers have shut down, some are still offering online services. Swedish furniture store Ikea has closed its only store in India in the southern city of Hyderabad, but customers can still order online.
"We have been listening to the advice of the Indian government, guidance from our global group and customer and co-worker feedback," Ikea India CEO Peter Betzel said in a statement. "We have taken a day-by-day and hour-by-hour approach, evolving our assessments and decisions as new information becomes available. We are evaluating and making decisions based on the local situation."