Nearly Rs 7 lakh crore of investor wealth was wiped out in a single day of trading on Monday as the Sensex crashed 1,624.51 points, its biggest ever.
A slump in the US equity markets on Friday coupled with fall in other global equity markets, including a near 9 per cent decline in China, meant that the Indian markets ended at a near 1-year low.
The S&P BSE Sensex lost 1,624.51 points (5.94 per cent) to close at 25,741.56, the CNX Nifty closed 490.95 points (5.92 per cent) lower at 7,809. This is the lowest level for Nifty since Oct 20, 2014 and the lowest level for Sensex since August 12, 2014.
The European markets slipped 3 per cent while the Hong Kong, Nikkei and Taiwan markets lost 5-6 per cent.
“The two important factors which led to Monday's chaos is the sharp fall in the rupee due to the increase in risk to emerging market (EM) currencies and the high demand to the offer for sale of the IOC requiring a total outflow of Rs 9,400 cr.
The sudden collapse in the developed equity market in the last 3 trading days due to continued breakdown in EMs has led to the carnage on Monday in India,” said Vinod Nair, head-fundamental research, Geojit BNP Paribas Financial Services.
Global crude oil, too, went below the $ 40 per barrel mark amid weak Chinese manufacturing growth and global oversupply.
Extending its two-week winning streak, gold surged Rs 150 to hit a three-month high of Rs 27,575 per 10 grams in the national capital on seasonal buying by jewellers as investors fled stock market. The rupee crashed below the crucial 66 mark by falling 90 paise to close at a two-year low of 66.73 against the $ (intra-day) due to heavy demand for the US currency from importers and some banks.
Foreign portfolio investors net sold shares worth Rs 2,340.60 crore on Friday, as per provisional data. Of the 50 stocks in Nifty, 49 stocks declined while one remained unchanged. As far as BSE 201 is concerned, 200 stocks declined while one advanced.
Vedanta led the list of losers on the Nifty losing nearly 15 per cent and ending the day at Rs 80.55 with volumes of 1.46 crore shares. Other major losers included GAIL (down 14.16 per cent to Rs 267.25), Tata Steel (down 13.83 per cent to Rs 204.45), Cairn (down 13.2 per cent to Rs 123), Punjab National Bank (down 11.36 per cent to Rs 141.25) and ONGC (down 10.63 per cent to Rs 228.75).
The most active stock futures on Monday was led by Reliance Industries, followed by HDFC Bank, State Bank of India and ICICI Bank. According to Motilal Oswal, the Calls are hinting at limited upsides.