It was mayhem and madness on the country’s major bourses as bears bludgeoned blue chip pivotals to their new nadir in the wake of selling spree coupled with frantic selling trigged by global credit squeeze which spooked the markets.

With the bulls cringing for cover under the heavy and frenzied fusillade unleashed by the bears, the benchmark 30-scrip Sensex tanked 642-point as foreign funds sought safer havens ducking possible spread of US subprime mortgage crisis.

Global meltdown
The broader S&P CNX Nifty of National Stock Exchange (NSE) nosedived by 191.60 points or 4.38 per cent to close at a two-month low of 4,178.60 from previous close of 4,370.20.

As soon as the market opened after, the Bombay Stock Exchange Sensex fell 415.99 points as it mirrored the impact of fresh global stocks meltdown. The index fluctuated in a range of 14,584.92 and 14,345.03 before ending the day at 14,358.21, a net fall of 4.28 per cent from Tuesday’s close.

Likewise, bourses worldwide too crumbled for the second day in a row on selling triggered by the turmoil in US credit markets after two other American mortgage lenders seemed to be in trouble. Market players said fresh selling onslaught was triggered by fears of a global credit crunch that led to consistent pull out by Foreign Institutional Investors (FIIs). All indices, including sectoral and dollex, were down by 4.0-6.5 per cent. Indices in Japan, China, Hong Kong, Singapore, Taiwan and South Korea ended down by 2.0 to 7.0 per cent.

Biggest fall
Incidentally, this is the biggest fall this fiscal and second biggest ever in absolute value terms. This is also third time this fiscal that the key Sensex has fallen over 600 points in a day. However, this is the second-biggest fall in 2007-08 and 33rd overall in percentage terms. Brokers said reports of scrutiny by Income Tax officials of returns filed by large cap companies in BSE and NSE could have also affected market sentiment. Analysts said selling by foreign funds indicated significant withdrawal requests received by hedge funds after expiry of August 15 deadline for redemptions during July-September quarter. FIIs’ net withdrawal has crossed Rs 2,500 crore so far in August, as per Sebi data.

“Market was flooded with the sellers even at prevailing lower levels on fears of further dip in the stock prices”, said a mumbai-based stock broker. Another added “bears were in full control of the market, even buying by domestic financial funds failed to arrest the weakening trend”.

Investors poor by Rs 17 lakh-crore
Mumbai, pti: Stock market investors, on Thursday, saw a whopping Rs 1,70,000 crore being wiped off their portfolios, taking total loss since the US subprime crisis first hit domestic bourses late last month to nearly Rs 3,30,000 crore.

The crash saw cumulative market capitalisation of all listed companies dropping to around Rs 42,77,000 crore, as against Rs 44,44,000 crore after market close on August 14. The total invested wealth in the stock market has seen sharp erosion since July 27, when the crisis in the US subprime credit segment first reached the Indian market. Since then, total market capitalisation on Indian bourses has gone down by close to Rs 3,30,000 crore from more than Rs 46,00,000 crore on July 26.

The combined market value of 30 blue chip firms on the benchmark BSE Sensex has fallen close to Rs 2,25,000 crore since July 27, including about Rs 90,000 crore on Thursday itself. Among Sensex blue chips, while Reliance Industries lost Rs 12,910 crore, ONGC saw an erosion of Rs 7,518 crore. Both RIL and ONGC have lost close to Rs 28,000 crore each since July 27.

On the BSE, all 30 Sensex scrips registered sharp losses. The market breadth was highly negative with 1,869 shares showing falls against 842 others in black. The trading volume spurted to Rs 5,646.63 crore from Rs Rs 4,232.40 crore on Tuesday.

The broad-based BSE-100 index fell sharply by 341.38 points to 7,385.39 from previous close of  7,726.77. The BSE-200 index and Dollex-200 were quoted lower at 1,750.59 and 717.34 at close compared to previous close of 1,829.76 and 749.78 respectively. BSE-500 Index slumped by 244.33 points to 5,623.14 from last close of 5,867.47.