Sensex retreats most in over 3 months,down 538 pts on China rout

Mumbai :The benchmark BSE Sensex tumbled the most in more than three months today as it fell by 537.55 points to crack below the 26,000-mark after renewed worries over the health of Chinese economy and geopolitical tensions in the Middle East combined to spook investors.

Amid heavy sell-off, the total market capitalisation of BSE listed companies crashed below the Rs 100 lakh crore-mark, wiping out nearly Rs 1.54 lakh crore from investor wealth.

Further accelerated selling activity here was a result of domestic manufacturing sector output shrinking to a 28-month low in December and fresh weakness in the rupee.

Other Asian stocks, which opened after a long break, were on the receiving end after a private survey showed Chinese factory data contracted for a fifth straight month.

Consequently, Shanghai index plunged by more than 7 per cent and trading was halted for the rest of the day.

“The slump in Chinese is expanding, which is impacting all the emerging markets. It is not a good start for the Indian market, which was hoping in expectation that FIIs will return post the holiday season,” said Vinod Nair Head-Fundamental Research at Geojit BNP Paribas Financial.

Besides, a flare up in the Middle East after Saudi Arabia cut diplomatic ties with Iran following a row over Tehran’s execution of a Shiite cleric also had its negative impact.

Global crude prices surged by 1.64 per cent to USD 37.89 per barrel while in the local market, rupee weakened by 45 paise to 66.59 (intra-day) against the dollar.

From the onset, the BSE 30-share Sensex remained in the negative zone and its settled 537.55 points or 2.05 per cent down at 25,623.35, its weakest closing since September 22. The index had gained about 201 points in the last two sessions.

The NSE Nifty fell below the 7,800-mark by losing 171.90 points or 2.16 per cent to 7,791.30 after hovering between 7,937.55 and 7,781.10. The index had last logged its biggest single-day fall of 185.45 points on September 1.

Across the board selling was led by telecom, banks, industrials, energy, capital Goods and healthcare stocks.
In all, 27 scrips out of the 30-share Sensex pack ended lower, while only Wipro, HUL and Asian Paints managed to keep head above water.

In other Asian markets, Nikkei, Hong Kong, S Korea and Singapore indexes plunged between 6.86 per cent and 1.62 per cent, while European opening also were lower with Germany’s Dax dropping 3.61 per cent, France CAC down 2.36 and London FTSE dropping 2.15 per cent.

However, Wipro rose by 0.28 per cent followed by HUL 0.07 per cent and Asian Paint 0.06 per cent.

Among the BSE sector and industrial indices, telecom fell by 3.20 per cent followed by banking 2.59 per cent, industrials 2.42 per cent, auto 2.12 per cent, realty 2.03 per cent, capital goods 2.09 per cent, healthcare 1.79 per cent, teck 1.75 per cent, oil&gas 1.46 per cent, metal 1.25 per cent, IT 1.37 per cent and energy 1.54 per cent.

The market breadth turned negative as 1,599 stocks ended lower, 1,289 closed higher, while 100 ruled stable out of total 2,988 stocks.

The total turnover rose further to Rs 3,363.75 crore from Rs 2,984.79 crore yesterday.

PTI