* Nifty 50 ends down 0.5%, Sensex falls 0.6%
* 16 Italian nationals test positive in India, tally at 28
* HDFC Bank top drag, down 2.8%
* IT stocks rise, help recoup some losses (Updates shares to close, adds details)
By Chris Thomas
March 4 (Reuters) - Indian shares closed lower on Wednesday after the country’s health minister confirmed the number of coronavirus cases had risen sharply to 28, fuelling worries that economic activity may be affected further.
More than 93,000 cases have been reported worldwide, and several thousand have died from the flu-like coronavirus, which emerged in the central Chinese city of Wuhan late last year and has since spread to more than 80 countries.
The NSE Nifty 50 index ended 0.46% lower at 11,251, while the benchmark S&P BSE Sensex closed down 0.55% at 38,409.48. The indexes dropped up to 2% in afternoon trade.
India said on Wednesday 16 Italian nationals in the country had tested positive for the virus.
“The biggest challenge that we are likely to witness in this situation is that overall economic activity will clamp down significantly - it’s a contagion effect we are looking at,” said Naveen Kulkarni, chief investment officer, Axis Securities.
The world’s second-most populous country after China is a particular concern due to the available countermeasures and population density, United States intelligence sources told Reuters last week.
Global stock markets were mixed as investors digested an emergency rate cut on Tuesday from the U.S. Federal Reserve aimed at combating the virus’ fallout, and a strong performance by Joe Biden in the Democratic Party primaries in the United States.
Indian equities, which had rallied in the previous session on hopes of a coordinated effort by major central banks to combat the economic fallout of the virus, were pressured on Wednesday by heavyweight financial stocks.
Top private-sector lender HDFC Bank Ltd was the biggest drag in the indexes, falling 2.8% to its weakest close since mid-September and pulling the Nifty Private Bank Index 1.8% down.
Conglomerate ITC Ltd dived 3.3% to its worst closing low since Jan. 2013.
Gains in IT stocks, helped by a weak Indian rupee, cushioned losses in the indexes, with Tata Consultancy Services Ltd up 2.3% and Infosys Ltd rising 1.6%.
Pharmaceutical stocks also marked some gains on Wednesday, with Sun Pharmaceutical Ltd, Dr.Reddy’s Laboratories Ltd and Cipla Ltd climbing as much as between 3% and 5.3%. (Reporting by Chris Thomas in Bengaluru; Editing by Maju Samuel and Sherry Jacob-Phillips)