Sensex, Nifty end with huge losses following Chinese stock market crash
Mumbai: The Indian equity markets suffered a major setback on Monday amidst a broad based sell-off in global stocks as a crash in the Chinese markets along with the escalation of tension in the Middle East spooked global investors sentiment.
The unexpected fall in Shanghai Composite Index, which tanked 7.4 per cent amidst a concern regarding growth slowdown forced the Chinese authorities to suspend stock market trading. It was the first time China used the “circuit breaker” mechanism it announced late last year.
Apart from the concerns regarding China led global growth slowdown, global investors also fears that the current stand-off between Iran and Saudi Arabia would escalate the sectarian conflicts in the Middle East, which has injected an element of uncertainty in the global oil market. Mirroring the weakness in global stocks, the Sensex registered its biggest fall in nearly four months to end the day at 25,623.35, plunging 537.55 points or 2.05 per cent.
As a result, gold has again become a safe-haven for investors. In Mumbai, standard gold (99.9 per cent purity) shot up Rs 295 to end at Rs 25,460 per 10 grams. “Sentiments were dominated by the massive sell-off in Asia and Europe after suspension of trading in Chinese shares post the sharp plunge in Shanghai Composite. Geopolitical tensions in the Middle-East also dampened sentiment. China’s PMI continues to underline its downward growth trajectory with equity markets reflecting a sub-seven per cent GDP figure for calendar 2016 and beyond,” said Vijay Singhania, founder director, Trade Smart Online. The fall in the market wiped out Rs 1.54 lakh crore worth of investors wealth pulling down the total market capitalisation of BSE listed firms to below Rs 100 lakh crore.
Download the all new Deccan Chronicle app for Android and iOS to stay up-to-date with latest headlines and news stories in politics, entertainment, sports, technology, business and much more from India and around the world.
