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Sensex sinks 1625 pts, biggest single-day fall in over 7 years

Mumbai: In a stock market bloodbath, benchmark Sensex on Monday sunk 1,624.51 points to end the day at 25,741.56 — the biggest in over seven years amid a global rout, while more than Rs 3 lakh crore got wiped out of the investors’ wealth.

The broader Nifty index of NSE sunk 491 points to end the day at 7,809.85 Finance Minister Arun Jaitley, speaking at an annual conference in New Delhi, said India faced multiple challenges emanating from global economic developments.

“We stand by the growth projections for the fiscal made at the beginning of the year. Demand and economic activity will increase in the coming months on back of reasonable monsoon.

Markets will settle down… the government and RBI are watching the situation closely,” Jaitley said.

“These days with a globally integrated economy, no day is an easy day,” the finance minister said, adding that the Indian economy is in a revival state and that there was a fear over a US Fed rate hike.

“China is creating ripples, resulting in a transient impact on India.” the minister was quoted as saying. RBI Governor Raghuram Rajan assured investors that the country was in a better position compared to many other economies.

“I wish to reassure markets macroeconomic factors under control; Country has $380 bn of forex reserves as and when to be used,” he said.

The overall investors’ wealth, measured in terms of total valuation of all listed stocks, was also down nearly Rs 3.5 lakh crore as it crashed below Rs 100-lakh crore mark and stood at Rs 97,64,237 crore in early afternoon trade.

The loss suffered by the 10 biggest companies in terms of market capitalisation was itself close to Rs 2 lakh crore. This is the biggest crash in seven and a half years and the third biggest ever for the BSE benchmark index.

Interestingly, eight out of the top-10 intra-day falls took place in the year 2008. Today’s fall is biggest since January 21, 2008 when the Sensex crashed by 2,062.2 points.

The market was witnessing all-round heavy selling across realty, power, oil&gas, bankex, auto, metal, capital goods and IT sectors. The 50-unit Nifty fell below the psychological 8,000-mark, while Sensex was seen moving close to 26,000.

The rupee, too, slumped to as low as 66.48 per dollar, its lowest since September 2013, as Asian markets reeled under fears of a China-led global economic slowdown.

The rupee was at 66.41/42 by 09.03 am, down from its close of 65.8250/8350 on Friday. A strong dollar demand from importers and banks, and heavy losses in domestic equity markets weighed on the local currency, forex dealers said.

The rupee dropped even as the US dollar weakened against other major global currencies overseas amid mounting global economic slowdown worries.

The rupee had lost 29 paise to close at two-year low of 65.83 against the US dollar on Friday on high demand for greenback from banks and importers. Among major Sensex losers, ICICI Bank fell by 4.5 per cent, Infosys by 3 per cent, Axis Bank by 5.3 per cent, Reliance by 4 per cent and HDFC by 3 per cent.

Tata Motors fell by over 6 per cent. Vedanta and GAIL Ltd also fell up to 6 per cent. Meanwhile, crude prices fell after slipping below USD 40 barrel for the first time in six years after weak Chinese manufacturing data.

Among other Asian markets, Shanghai Composite dived 8.35 per cent, Japan’s Nikkei dropped 3.10 per cent and Hong Kong’s Hang Seng 3.26 per cent. The US Dow Jones Industrial Average ended 3.12 per cent down in Friday’s trade.