The sensex joined the global equity selloff with a 538-point dive on Monday -the biggest fall in over three months -triggered by a 7% drop in Chinese stocks following weak manufacturing data. The rupee fell to a two-week low of 66.62 - 48 paise from its previous close of 66.14 -recording its sharpest single day fall since November 9, 2015.
The sensex fell 2% to close at 25,623, the broad-based nifty lost 172 points or 2% to settle at 7,791. Both indices hit a two week low with banking, telecom and automobile stocks facing a selloff. The Dow Jones Industrial Average opened 400 points lower. Earlier in the day , Japan's Nikkei closed 3% lower and the pan-European FTSEurofirst 300 index fell 2.5%. S&P 500 fell 2% as emerging shares dropped more than 3%.
Tata Motors, which generates a third of its operating profits from China, was the worst hit among the sensex stocks losing 6% on Monday .The market capitalization (of BSE companies) slid below Rs 100 lakh crore. Investor wealth, as measured by the m-cap of all stocks listed on the BSE, fell by about Rs 1.51 lakh crore.
“There are risk factors across the world. In China it is not clear whether the authorities want a weaker currency .In the Middle East, tensions between Saudi and Iran are raising concerns. There is also a fear that the Pathankot attacks might escalate tensions in the Indian subcontinent,“ said KN Dey , executive director, Mecklai Financial.
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