Mumbai, Dec. 17: The sensex was battered again on Monday, plunging 769.48 points — its second-highest intra-day fall — as global markets swooned on fresh concerns about inflationary pressures in the US that appeared to limit the possibility of fresh Fed rate cuts in the near future.
After opening weak in the morning, the sensex went into a nosedive, plummeting to 19261.35 — a drop of 1114.52 points from its record high of 20375.87 on Wednesday. The market lost Rs 3 lakh crore of its valuation on Monday as investors pressed the panic button. The biggest stumble for the sensex was on May 18, 2006 when the benchmark index crashed by about 826 points.
Asian share markets also tumbled, with Japans Nikkei losing 1.71 per cent and Hong Kongs Hang Seng index crashing by 967.06 points — one of its worst falls ever.
The nifty — the bellwether index of the National Stock Exchange (NSE), which was looking a little solid a few days back when it crossed the 6000 mark — plunged 4.48 per cent to 5777, recording its biggest single-day fall. The midcap stocks plunged 366.36 points and the BSE-100 shares dropped 482.85 points while the sectoral indices displayed huge losses on weak global cues and rising crude oil prices. Metal, realty and PSU stocks were the worst hit with losses of 7.28, 5.65, and 5.63 per cent, respectively.
We had made a sharp upward movement from 18000 to 20000 within a short span and the investors were not keen to sell during the year-end. After Dow and Nasdaq made sharp corrections on Friday, investors scooped gains from the realty and metal sectors, which have been the best performing stocks on the Nifty, said Hitesh Agrawal, vice-president, research at Angel Broking Ltd.
Asian markets turned weak right after receiving the data from the US consumer price index (CPI). The situation is not very clear for the Indian investors at this moment. The Fed is now unlikely to cut interest rates at its January meeting, said V.K. Sharma, head of research at Anagram Stock Broking Ltd.
The State Bank of India, the countrys largest PSU bank, and Reliance Industries, the largest private sector company, lost 4 per cent each. Realty giant DLF saw its stock fall by 7.53 per cent, while JSW Steel sank about 13 per cent at Rs 1,163.50.
Investors are also worried about a possible increase in interest rates in China. Since the Indian market has seen a quick rally to attain the 20K mark, the investors need to be careful. We may see some more corrections over the next few days, said Sree Sankar, head of research at IL&FS Investsmart.