Monday mayhem: Indian stocks plunge amid global selloff

The equities in Indian markets were the worst hit across the globe on Monday’s trade, as the escalating geopolitical tensions US and Iran forced global investors to move their allocations towards safer assets.

The 30-share Sensex of BSE tanked by 1.90% (787.98 points) during the day’s trade to close at 40,676.63 points. On Friday, the index, which was witnessing heavy buying in the past few months cracked by 162 points, as the news of the US military attack killing Iran’s top General Qasim Soleimani poured in.

On Monday, the market breadth was heavily negative, with 593 advances compared with 1,935 declines.

During the day’s trade Indian investors were poorer by Rs 3.01 lakh crore – losing 1.9% of their wealth, as all the indices on the BSE, including the consumer durables traded in the red. Among the sectoral indices, finance, energy, realty and oil & gas were the worst hit.

The broader exchange Nifty50 also closed with a loss of 1.91% (233.6 points) at 11,993.05. The tension also affected the Indian rupee which was the worst-performing currency among the Asian emerging markets on Monday.

Other than India, Japan’s Nikkei 225 Index cracked 1.91%, Germany’s DAX Performance Index cracked 1.76%, Turkey’s BIST 100 1.66%.

“Long overdue correction was looking for a trigger which has happened. In the longer-term pension allocations may ensure a softer than expected landing,” said Anubhav Shrivastava, Partner, Infinity Alternatives.

Experts suggest that the Japanese market is the first stock market to open, hence it suffered the maximum loss such a huge loss. The loss in the Indian equities was furthered by the fact that both Sensex and Nifty had seen a massive rally since the reduction of Corporate tax rates in September last year and correction was waiting for a trigger, according to analysts.

On the currency front, Rupee was the worst performer in Asia’s emerging markets basket losing 25 paise (0.35%) on Monday on top of 42 paise loss on Friday. The rupee was trading at 72.04 against the US dollar. Other than a rupee, Korean Wong crashed 0.43%, Peruvian Sol cracked 0.48% and Brazilian Lira cracked up 0.84%.

However, as the global investors withdrew monies from the global stock markets, the prices of gold, seen as a safer asset, surged by $1,576.37 per ounce, jumping by 3.4%.