Friday , December 9 2016
Home / Business / Sensex tanks over 700 points on China woes, global rout

Sensex tanks over 700 points on China woes, global rout

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Mumbai: Concerns over Chinese economy and global growth meltdown triggering widespread panic sell-off, pulled down the Sensex sharply by over 700 points to close below the 28,000 mark this week.

The broader 50-share Nifty also tanked 219 points to end below 8,300 level. Both the indices closed at their two-month lows.

Global stock markets tumbled after a survey showed Chinese factory activity contracted at their fastest pace since the depth of the global financial crisis in 2009.

Sharp erosion of rupee value amidst emerging market currency volatility following China’s yuan devaluation and downgrading the country’s GDP growth target to 7 percent by Moody’s, mainly contributed towards grim market mood.

Widening trade deficit in the face of sluggish exports as well as lack of progress in GST Bill in the monsoon session of Parliament, and absence of any positive earnings also added to the downtrend.

On the macro front, India’s exports narrowed for the eighth straight month by 10.3 percent in July to USD 23.13 billion, widening the trade deficit to USD 12.81 billion.

Earlier, on Tuesday, Moody’s revised its growth outlook to 7 percent for the year, citing monsoon deficit worries and concerns over stalemate in the reform process.

Even though the market rallied on Wednesday, largely outperforming its Asian peers, it remained under intense selling pressure rest of the days.

However, the much-awaited clarity on FIIs’ liability to pay MAT led some recovery towards the fag-end trade, but the damage was already done.

In a big relief to FIIs, government-appointed committee on MAT recommended that there was no case for imposing the controversial minimum alternate tax (MAT) on FIIs retrospectively, a suggestion that the government is said to be “favourably” considering.

The Sensex resumed marginally higher at 28,093.54 and fluctuated between 28,095.97 and 27,131.44 before finishing at 27,366.07, revealing a steep fall of 701.24 points, or 2.50 percent.

Similarly, 50-share Nifty index also plunged by a whopping 218.60 points, or 2.57 percent to end at 8,299.95 after oscillating between 8,530.60 and 8,225.05.

Foreign portfolio investors (FPIs) sold shares worth a net amount of Rs 3,108.67 crores during the week as per SEBI’s record, including the provisional figure of Friday.

In worldwide trade, major financial markets went into a tailspin– their worst week of the year– as lacklustre Chinese macro data fuelled concerns about the impact of its slowdown on the global economy, possibly causing the next recession.

Markets sentiments also dampened over deepening worries on commodity slide amid expectation of imminent Fed rate hike.

Beijing stunned the world by devaluing the yuan last week.

PTI