In sympathy, Sensex, the key equity index of the Bombay Stock Exchange (BSE) dived 5.94%, while the wider 50-scrip Nifty of the National Stock Exchange followed a similar trend and closed 491 points or 5.92% down at 7,809 points
Stock markets from Japan to the US are on a major tailspin. A huge fall in the US stock market on Friday has triggered off a domino effect on global stock markets after two years of relative calm.
Nikkei 225, the main index of Asia’s biggest stock market, Japan, closed 4.6% lower at 18,540.68 points, its lowest level in nearly five months. The Hong Kong Hang Seng index dropped 4.9% to 21,313.28, while the Shanghai stock index collapsed 8.5%. In sympathy, Sensex, the key equity index of the Bombay Stock Exchange (BSE) dived 5.94%, while the wider 50-scrip Nifty of the National Stock Exchange followed a similar trend and closed 491 points or 5.92% down at 7,809 points. The rupee also fell to 66.70 to a dollar.
More bloodbath seems to be in store as US pre-market futures for S&P500 and Dow are quoting 3.5% lower while Nasdaq futures is already limit down.
The S&P BSE Sensex which opened at 26,730.40 points, closed at 25,741.56 points, down 1,624.51 points or 5.94% from its previous close of 27,366.07 points. The benchmark index touched a high of 26,730.40 points and a low of 25,624.72 points during the intra-day trade.
Chinese shares continued their sharp fall on Monday as concerns over the country's slowing growth and volatile markets sparked panic among traders. The mainland benchmark index, the Shanghai Composite, closed down 8.5% at 3,209.91 points, extending last week's losses. The sell-off continued despite Beijing's latest attempts to reassure investors. China's dramatic tumble has dragged down markets across the region.
Chinese investors are looking to the government to solve the problem of a falling market. Beijing has responded by allowing its main state pension fund to invest in the stock market. Under the new rules, the fund will be allowed to invest up to 30% of its net assets in domestically-listed shares. By increasing demand for them, the government hopes prices will rise. But this has failed to reassure traders both in China and abroad. There are fears that if millions of citizens lose their life savings in the stock market, the government may face its greatest fear: widespread social unrest.
Reacting to the sharp fall in the Indian markets when they opened trading on Monday, Finance Minister Arun Jaitley held "external factors" responsible for the current volatility.
"Factors responsible for this (market fall) are entirely external, there is not a single domestic factor involved," Jaitley told reporters here on the sidelines of the conference of chief commissioners of the Central Board of Excise and Customs.
"No doubt this turbulence is transient and temporary in nature and the markets will settle down once the turbulence is over," he said.
"All concerned authorities, the government of India, the Reserve Bank are watching the situation very closely," the minister said.
While checking out the reaction of market experts, Nilesh Shetty, Associate Fund Manager- Equity, Quantum AMC, said on today’s market crash, “Expensive valuations with weak corporate earnings growth meant the market had significantly higher downside risks. Weak global cues especially from China have acted as a trigger for this correction. Despite near term risks, lower market levels could prove to be a great buying opportunity for the long term investor.”
The top gainers and top losers in the major indices in the Indian stock markets are given in the table below:
The closing values of major Asian indices are given in the table below:
Among European indices, the DAX was at 9,845.95, down 2.75% and the FTSE 100 was at 6,018.32, down 2.74%.