With Chinese sell-off and ongoing Greece fears, stock markets crashed following equity rout in China on Wednesday. The benchmark Sensex went into a downward spiral and tanked as much as 484 points, thereby witnessing the biggest single-day fall in over a month.
On heavy selling, the 30-share indices saw over 483-point fall, or 1.72 per cent, to settle at 27,687.72. The broader Nifty too lost 147.75 points, or 1.74 per cent, to end the day at 8,363.05.
The rupee also lost ground, which closed at 63.60 against dollar, down 14 paise. Gold too lost some of its sheen. Brokers attributed the sharp fall in financial markets to the huge sell-off in Asian bourses after a Chinese stock market rout rattled investors as the deadline looms for Greece to seal a deal with its international creditors.
This is the biggest single-session fall of the Sensex since a plunge of 661 points recorded over a month ago on June 2. Metal stocks bore the brunt after base metals led by copper fell to multi-year lows after the China rout, stoking fears that the sell-off may trigger a broader slowdown in the world's biggest metal consumer. In the metal segment, Vedanta, Hindalco and Tata Steel came under heavy selling significantly.
According to the media reports, Shanghai stock index plunged over 8 per cent in trade, as its Government's moves failed to halt the decline, resulting in a slump in the stock market. At least over 1,200 companies have stopped trading on mainland Chinese exchanges.
Besides, a continuous slide in Chinese stocks weighed on the global commodity sector, with prices of copper, coal, natural gas and iron ore falling towards their 2015 lows.
Similarly, Japan's Nikkei fell 3.14 per cent and Hong Kong's Hang Seng 5.84 per cent, its biggest one-day drop since October 2008.
Brent crude for August fell 13 cents to $56.72 per barrel. Gold prices too declined to an over three-month low, plunging Rs 330 to Rs 26,170 per 10 grams in the national capital. A firming dollar only reduced its appeal.
Similarly, in Kolkata, gold dropped Rs 220 to Rs 26,310 per 10 grams while in Chennai, it lost Rs 200 at Rs 26,290 per 10 grams. Globally, the bullion fell 0.7 per cent to $1,147.36 an ounce in london.
While Indian markets saw a remarkable resilience amid volatility elsewhere when Greece said 'no' in the referendum on bailout package contingent upon harsher austerity, all eyes will be on Sunday's meeting which will decide the fate of Greece in eurozone.
However, experts said that the fall in commodity prices would impact metal companies and public sector banks in India. "With the current scenario of commodity prices which have seen a sharp fall in India, there may be an impact in metal sector as well as public sector banks in the country," said a commodity analyst in a reputed brokerage house in Mumbai.
A fresh weakness in the rupee against the US dollar also dampened mood, equity brokers said. "Markets opened for the day on a weaker note and remained in the red through the day's trading session. Markets worldwide corrected on the back of concerns about a probable Greece exit and new renewed fears over Chinese markets," said Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio.
The major market laggard was Vedanta as Tata Motors, Hindalco, Tata Steel, HDFC and GAIl too tanked. Of the 30-share Sensex pack, 29 ended the day lower.
It was only HUl that bucked the trend and gained marginally. Sectorally, the metal index bore the brunt, followed by auto, realty, banking, PSU, oil and gas and IT. In line with the trend, broader markets mid-cap and small-cap indices closed lower by 1.30 per cent and 1.28 per cent, respectively.