With China growth concerns as China’s stock markets on Thursday experienced shortest trading day in its history and its stocks tumbled over 7 per cent within the first 30 minutes of trading, Dalal Street, too, joined the global sell-off, diving the benchmark Sensex down by 555 points to end at a 19-month low of 24,851.83, which is the worst single-day fall of the year.
Extending losses for the second straight day, the rupee also declined by 11 paise to close at more than 3-week low of 66.93 against the US dollar on persistent demand for the American currency from banks and importers amid sharp fall in equities. Besides, sustained foreign capital outflows affected the rupee sentiment.
Having registered the massive loss this year, the domestic market also experienced a heavy selling pressure due to China’s move to weaken the Yuan faster to fight a slowing economy, triggering a massive global sell-off. The NSE Nifty felt the heat, too, as it cracked below the 7,600-mark as selling picked up across sectors. The losses came amid concerns over a slowing growth in China, the world’s second-largest economy, spooking investors worldwide, and pressure on its currency from capital outflows.
All the 30 stocks in the Sensex team led by BHEl (6.98 per cent), Tata Steel (6.85 per cent) and Tata Motors (6.15 per cent) ended in the red. The sell-off also sparked losses in Axis Bank, Maruti Suzuki, ONGC, SBI, Adani Ports, l&T, Bajaj Auto, Hindustan Unilever, NTPC, Hero MotoCorp, M&M, HDFC ltd, lupin, Cipla, RIl, Dr Reddy’s and ITC, falling up to 4.98 per cent. Realty, infrastructure, auto, metal and capital goods were among the worst hit as investors got anxious amid a global sell-off. Power, PSU, oil and gas and banking also slumped.
As far global crude scenario is concerned, the China market crash saw the US benchmark crude contract that slid below $34 a barrel while Brent fell to $33.61 per barrel.
China’s central bank on Thursday also lowered the Yuan against the US dollar by 0.51 per cent to 6.5646, the lowest since March 2011. The 30-share BSE index ended the day with a steep fall of 554.50 points, or 2.18 per cent, at 24,851.83, its lowest closing since June 4, 2014, when it closed at 24,805.83. The Sensex has now lost 1,309.07 points in four straight sessions.
Market experts feel that the investors may experience more pain till the upcoming Budget. The only silver lining was comments from Parliamentary Affairs Minister Venkaiah Naidu, who was quoted as saying that the Government has agreed to the conditions laid down by the Congress to break the GST stand-off.
“The global markets are facing a currency-led uncertainty that’s never been as stronger. While the impact is highly overdone in the short term, there is still some more pain for January up until closer to the Budget,” said Dinesh Rohira, founder and CEO, 5nance.Com.
The broader NSE Nifty also settled at 7,568.30, a sharp fall of 172.70 points, or 2.23 per cent. Asian markets went into a tailspin, with Shanghai shares crashing 7.32 per cent, forcing authorities to suspend trading less than half an hour after opening as the new circuit-breaker tripped for the second time in a week.
As for overall losses, the BSE realty index suffered the most tumbling 4.50 per cent, followed by infrastructure 3.91 per cent, auto 3.72 per cent, metal 3.72 per cent and power 3.45 per cent. In line with the overall trend, the BSE small-cap and mid-cap indices plunged 2.87 and 2.61 per cent, respectively.
The weakness in Shanghai’s composite index triggered an Asian share slump of 7.36 per cent following overnight losses in US markets. Foreign portfolio investors net sold shares worth Rs242.48 crore on Wednesday, provisional data showed.
Japan’s Nikkei was down 2.33 per cent and Hong Kong’s Hang Seng 3.09 per cent, with Europe dropping to a three-month low in opening trade after yet another China rout. US stock futures slumped, indicating a downbeat open on the Wall Street.