Surprised by Donald Trump’s victory in the US presidential polls and the Modi Government’s decision to demonitise high-value currency notes, the stock market saw a massive crash on Wednesday morning. But it bounced back sharply as investors reposed their faith in the long-term stability of the Indian economy. Shares of real estate and other cash-focussed sectors were the worst hit, while major losers in the
Sensex pack were Adani Ports, Hero MotoCorp, ITC, TCS, Bajaj Auto, M&M, Maruti, Infosys, HDFC and Tata Steel. Cipla, Hindustan Unilever and Wipro also fell.
Wall Street, however, remained surprisingly calm as it turned green after staying briefly in the red.
The realty sector was hit the hardest since the crackdown on black money might have a lingering impact on construction companies already reeling under a massive slowdown in demand. The banking sector led the recovery as the measure against black money is expected to boost banking deposits and earnings.
The lone gambling stock, Delta Corp, which operates a slew of offshore casinos in Goa, was locked at 20 per cent circuit, with the investors fearing that the crackdown on black money would drastically reduce the footfall of casinos.
The Rupee also recouped all its morning losses to close at a two-month-high of 66.43 against the US dollar.
The Sensex finally closed 338.61 points lower at 27,252.53 points after recovering more than three-fourth of its early morning losses. The Sensex opened sharply lower at 26,251.38 points on Wednesday morning and moved further down within seconds to touch a low of 25,902.45 points, down 1,689 points from the previous close, with all 30 stocks in the benchmark index deep in the red.
Gold appeared to be a gainer as an investment option with sovereign gold bonds and gold-linked Exchange Traded Funds gaining ground as key non-cash instruments. The market saw hectic buying at lower levels in afternoon trade, after the initial double-shock saw the benchmark Sensex plunging by 1,689-points within seconds into the opening trade, initially causing a notional loss of nearly Rs 6 lakh crore from total value of all listed stocks.
Among others, six Sensex stocks, Dr Reddy’s, Sun Pharma, SBI, Power Grid, GAIl and lupin and Bank of Baroda, closed in the green with substantial gains.