MUMBAI: A global market sell-off, triggered by weak employment data in US and fears of large speculative losses in the forex market due to a strengthening Japanese yen, also swept Dalal Street, sending investors into a panic-selling mode on Monday and pulling down the sensex by 2,223 points, or 2.7%, to78,759 points. On NSE, the Nifty lost 662 points to close at 24,056 points.
The day’s losses in sensex and Nifty were the second biggest single-day losses in these indices this year. Geopolitical tensions in West Asia, after a top US official predicted Iran could attack Israel soon, also unnerved global investors, market players said.
The day’s sell-off in India, which was led by foreign funds with a Rs 10,000-crore-plus net outflow, left investors poorer by Rs 15 lakh crore – the 2nd biggest single-day loss in market cap ever – with BSE’s m-cap now at Rs 454.7 lakh crore. Domestic institutional investors were net buyers at Rs 9,156 crore, but couldn’t cushion the sell-off.
Selloff in midcap, smallcap stocks worse
Gold and crude were trading 1% lower in early trades in New York, while bitcoin slumped over 8% to a multi-month low.
The day’s session in India was greatly impacted by sell-off in Japan and South Korea, and in Taiwan. While Nikkei in Japan plunged over 12%, Korea and Taiwan each were down 9%. Following its global peers, the Indian market opened gap down and corrected sharply during the day, said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services.
Post mid-session, “European stocks fell, extending last week’s decline amid a deepening global rout in equities and a rotation away from the technology shares that have powered this year’s rally,” said Deepak Jasani, head of retail research, HDFC Securities.
“Going forward, we expect volatility to continue ahead of RBI policy and multiple global headwinds, including the unwinding of yen carry-trades, recession fears in the US, and escalating tensions in the Middle East. The US slowdown is a bigger concern and sooner or later the US Fed will bite the bullet of interest rate cuts which should provide relief in the current environment,” Khemka said.Gold and crude were trading 1% lower in early trades in New York, while bitcoin slumped over 8% to a multi-month low.
The day’s session in India was greatly impacted by sell-off in Japan and South Korea, and in Taiwan. While Nikkei in Japan plunged over 12%, Korea and Taiwan each were down 9%. Following its global peers, the Indian market opened gap down and corrected sharply during the day, said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services.
Post mid-session, “European stocks fell, extending last week’s decline amid a deepening global rout in equities and a rotation away from the technology shares that have powered this year’s rally,” said Deepak Jasani, head of retail research, HDFC Securities.
“Going forward, we expect volatility to continue ahead of RBI policy and multiple global headwinds, including the unwinding of yen carry-trades, recession fears in the US, and escalating tensions in the Middle East. The US slowdown is a bigger concern and sooner or later the US Fed will bite the bullet of interest rate cuts which should provide relief in the current environment,” Khemka said.
