Why did the Nifty and Sensex correct so sharply on the 28 February?

The sharp correction was largely driven by weakness in global markets. On Thursday, the Down and NASDAQ had lost more than 4% and that rubbed off on the Indian markets. Also, the global markets are increasingly veering round to the view that the virus scare could lead to a full-fledged slowdown in global growth. IMF has already warned of a 30-40 bps loss in GDP growth. Indian markets were also extremely wary ahead of the GDP data on 28 Feb evening and some economists are even expecting it to go as low as 4%. FIIs have sold nearly Rs.10,000 crore of equities in the first four days of the week and that is taking its toll on the markets leading to a much sharp correction. Also, Friday saw a massive unwinding of F&O positions in the market ahead of a long week end. All this led to the Nifty losing over 400 points. Now, Nifty has lost over 1000 points from the peak in just five days.