Sensex Thursday plunged by 760 points as the biggest stock sell-off since February roiled the global markets triggered by the Wall Street collapse on Wednesday.
Global markets from Europe to Asia sank after Wall Street suffered its worst hammering in over eight months, as fears over rising US Treasury yields sparked a broad sell-off of risky assets. The news spooked the Indian markets, which had been battling a depreciating rupee, and fears of a credit crisis following a spate of defaults at IL&FS.
The 30-share index, which commenced on a weak note, plunged by over 1,000 points at one stage, breaching the 34,000-mark and hit a low of 33,723.53, before staging a partial recovery to touch a high of 34,325.09 in afternoon trade. The index finally ended 759.74 points, or 2.19 per cent, lower at 34,001.15. This is the lowest closing since April 11. It had gained 461.42 points Wednesday.
After Dow crashed 832 points (over 3 per cent) on Wednesday, Japan’s Nikkei crashed 3.89 per cent, the steepest single session drop since March, Shanghai Composite Index dropped 5.22 per cent — its worst session since April 2016 — while the Hong Kong’s Hang Seng lost 3.73 per cent. In the Eurozone, Paris CAC 40 dropped 1.36 per cent and Frankfurt’s DAX was down by 1.20 per cent in their late deals. London’s FTSE too was down 1.70 per cent. The tech-heavy Nasdaq Composite dropped more than 4 per cent, its biggest one-day decline since June 2016, while the S&P 500 fell 3.3 per cent, its worst day since February.
The NSE Nifty settled at 10,234.65, down 225.45 points, or 2.16 per cent. It moved between 10,138.60 and 10,335.95 during the day. Investor wealth eroded by Rs 2.69 lakh crore to Rs 135,70,403 crore. “This sell-off is part of the global sell-off triggered by the sharp cut in the mother market US,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services. This is leading to capital outflows from emerging markets (EMs) like India. Apart from the rising bond yield in the US and EM currency woes, there are global trade skirmishes impacting the sentiment, he said.
The rupee, after hitting another record low of 74.50 against the dollar in early deals, turned positive in late afternoon and closed 8 paise higher at 74.12.
SBI was the biggest loser, plunging by 5.74 per cent, followed by Tata Steel 4.60 per cent. Stocks of IT bellwether TCS fell 3.10 per cent ahead of September quarter earnings.