Continuing with its downward bias, the market saw yet another sell-off due to China nightmare and lingering worries over monsoon to some extent. losing for the sixth straight session, the benchmark BSE Sensex on Monday closed below the 25,000-mark for the first time in 15 months, losing 308 points in a day.
Meanwhile, the rupee also tumbled by 36 paise to 2-year low at 66.82 against UD dollar on persistent dollar demand from banks and importers due to sustained foreign capital outflows amidst sharp fall in equity markets. The domestic currency opened lower at 66.60 as against last weekend’s level of 66.46 at the Interbank Forex market.
As far as markets are concerned, the impact of the sell-off was so heavy that 26 stocks in the 30-Sensex pack turned red. The Nifty too couldn’t take the selling pressure and cracked below the 7,600-mark, sinking to the lowest in 13 months. “Markets are increasingly getting concerned about the slowdown in the Chinese economy and we believe that the sell-off in the domestic markets will continue until China stabilises or clarity emerges on US interest rates,” said Vijay Singhania, Founder-Director, Trade Smart Online, a leading brokerage firm.
Throughout the day, Shanghai stocks see-sawed in and out of volatility following an extended weekend break as China lowered its GDP growth to 7.3 per cent, from the previous 7.4 per cent. The world’s second-largest economy also saw its forex reserves in August record the largest monthly fall -- $93.9 billion - at $3.55 trillion. The woes of rupee added to the market downfall, with the currency cooling against the dollar before settling at 66.82.
The dismal show is aggravated by monsoon worries as there were reports that the Indian Meteorological Department now expects rains to be 82 per cent of the long-term average (lTA), as against its earlier forecast of 88 per cent.
However, after trading hours, the department clarified that that there won’t be any revision in the lTA figure. The 30-share index showed strength in the beginning, climbing to a high of 25,387.32, but lost confidence due to profit-booking. It slipped to end lower by 308.09 points, or 1.22 per cent, at 24,893.81 -- its lowest close since June 4, 2014.
The broader NSE Nifty ended the day below the psychological 7,600-mark tumbling 96.25 points, or 1.26 per cent at 7,558.80, the lowest level since July 15, 2014 when it had closed at 7,526.65.
Axis Bank led the fall show (3.90 per cent) while others such as Vedanta, ICICI Bank, Hindalco, lupin and BHEl lost big time too. Sector-wise, BSE healthcare fell most by 2.57 per cent, followed by metal, banking, power and capital goods.