Dalal Street in Bear Grip After China-led Global Carnage
Markets see deep cuts as selloff in global markets pick up pace
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Hightened Volatility Likely
That’s a wrap of our live coverage of today’s stock market crash. About 7 lakh crore of investors’ wealth has been wiped out in a single day. China is likely to continue to weigh on market sentiment through this week and the ensuing volatility will keep investors on their toes.
Top 5 Factors For Today’s Fall
- The slowdown in China triggered panic selling. Markets cracked over 9% in trade to register its lowest level since March, thanks to the weak manufacturing data on Friday. Disappointment over the lack of a liquidity move by the central bank added to worries.
- US markets saw deep cuts on Friday, in its steepest one-day drop since 2011. Weak Chinese manufacturing data, and the recent free-fall in China’s stock market, rattled investors’ nerves and led to Friday’s tumble.
- Brent and US crude oil futures hit their fresh 6-1/2-year lows as investors continue to worry about weak demand as China’s economy slows amid a global supply surplus. Brent crude hit its intraday low of $45.00 earlier in the day. That’s the lowest since $42.59 marked in March of 2009.
- Overseas investors have pulled out nearly Rs 2,000 crore from Indian equities since the beginning of August, amid concerns over Chinese economy coupled with sharp erosion in the value of rupee.
- The rupee fell to fresh 2-year low at the start of trade. The currency trimmed initial losses, but was still down by 59 paise to 66.42 in late morning deals on continued dollar demand from banks and importers coupled with heavy capital outflows amid weakening greenback overseas.
Biggest Single Day Fall In 2015
The market saw the biggest single day fall in 2015. The Sensex crashed 1,624.51 points or 5.94% to 25,741.56. The Nifty managed to hold 7,800 level after hitting day’s low of 7,769.40. The index fell 490.95 points or 5.92% to 7809.
The market breadth was extremely worrisome with about 2477 shares declined against 318 shares advanced on the Bombay Stock Exchange.
Today’s carnage wiped out more than Rs 7 lakh crore market capitalisation.
Banks, metals, oil and capital goods stocks crumbled today. Vedanta, GAIL, Tata Steel, ONGC, Reliance Industries and Cairn India were the biggest losers, down 9-15%. However, only NMDC closed in green on Nifty 50.
Tata Motors Skids 8% On China Slowdown Fears
Shares of blue chip Tata Motors remain under heavy selling pressure, slipping nearly 8% to hit fresh 52-week low of Rs 306.85 on fears of likely slowdown in Chinese growth and damages of JLR vehicles in blast last week.
The stock has lost 36% so far in 2015 and halved from its 2015 high of Rs 605.56 on the BSE. Consistent delivery based selling has been hurting share price as well, as the situation worsens in China.
The Chinese luxury car market’s contribution to total sales of Jaguar Land Rover (the subsidiary of Tata Motors) declined to 15% from 20% earlier on slowdown in demand.
Sensex Tumbles 1,250 pts; PNB, BHEL, YES Bank, BoB Down 9%
The market slipped further in the afternoon trade on the back selling pressure. The Sensex is down 1,260.57 points at 26105.50, and the Nifty is down 391.35 points at 7908.60. About 284 shares have advanced, 2370 shares declined, and 39 shares are unchanged.
BHEL, Tata Steel, Vedanta, ONGC, Gail India, YES Bank, Bank of Baroda were down between 8-9%.
China Fears Wipe 230 Million Euros Off European Markets
European stocks fell sharply, wiping hundreds of billions of euros off the region’s top share index, which hit a seven-month low on fears of a hard landing in the Chinese economy, which led to 9% fall in the Shanghai Composite Index.
The pan-European FTSEurofirst 300 was down 2.8%, wiping around 230 billion euros ($264.04 billion) off the index.
Also sinking were fund managers, which are sensitive to market turmoil that could hit returns. The STOXX Europe 600 Financial Services index, down 3.6%.
We are in the midst of a full-blown growth scare... (and) China is at the epicentre. recent investor worries might be overdone.
–Strategists, JPMorgan Cazenove
Market Mayhem
- BSE Midcap plunged 4% and Smallcap lost 4.8%
- All sectoral indices continued to be in the red
- Bank Nifty plummeted almost 5%
- GAIL, BHEL, ONGC, Tata Steel, Vedanta are the biggest Sensex losers
The market saw biggest ever fall in a single day in 2015, dragged by nervousness across the globe on likely slowdown in Chinese economy. The Sensex crashed 1,045.26 points or 3.82% to 26320.81 and the Nifty slipped 322.15 points or 3.88 percent to 7977.80.
The global risk off trade has impacted Indian equity markets also. India, however, derives some positives from the current global meltdown. Brent crude, at $44 per barrel, will ease the current account deficit further, which will also have a positive impact on inflation. This will be a serious positive for several Indian companies. The rupee depreciation will also be positive for exporting sectors and companies, especially the ones which have large exports to US.
–Dipen Shah, Kotak Securities
The BSE Midcap plunged 4% and Smallcap lost 4.8%. About 280 shares have advanced, 2140 shares declined, and 45 shares are unchanged on the Bombay Stock Exchange.
GAIL, BHEL, ONGC, Tata Steel, Vedanta and YES Bank topped the selling list on Sensex, down 5-7 percent. All sectoral indices continued to be in the red. Bank Nifty plummeted almost 5%.
The rupee slumped to a fresh 2-year low, below the 66 mark, down 65 paise to 66.45 a dollar as Asian markets reeled under fears of a China-led global economic slowdown.
The China rout accelerated, leading Asia sell-off. Markets hit multi-year lows. Shanghai index dropped 7.8 percent even as authorities allowed pension funds managed by local governments to invest in the stock market for the first time.
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