Global selloff, West Asia tensions rock Dalal Street; Sensex tanks 2,222 points

Vijay C Roy

Tribune News Service

Chandigarh, August 5

Equity benchmark indices BSE Sensex and the NSE Nifty fell sharply on Monday to end in the red, in tandem with losses among global peers.

At the end of session, Sensex was at 78,759.40, down as much as 2,222.5 points or 2.74 per cent. The index plunged nearly 3 per cent to hit the day’s low of 78,295.86 on Monday. Similarly, the Nifty50 also tumbled 662.10 points or 2.68 per cent to settle at 24,055.60. After posting a gap-down opening, the index tumbled 3.33 per cent to hit Monday’s low of 23,893.70.

Vishnu Kant Upadhyay, AVP, Research and Advisory, at Master Capital Services Ltd, said the Indian indices experienced a continued decline for the second consecutive session, with the Nifty50 plummeting nearly 3.5% and the Sensex dropping more than 4% from their all-time highs recorded last week. “This significant sell-off in domestic equities has been primarily driven by weak global sentiments following disappointing US economic data, particularly non-farm payrolls, manufacturing PMI and jobless claims, which have raised concerns about a potential economic slowdown in the world’s largest economy,” he said.

In the broader markets, the Nifty SmallCap and MidCap indices fell 4.5 per cent and 3.5 per cent, respectively. Sectoral indices also faced mayhem, ending in red with losses in auto, metal and IT sectors of up to 4.85 per cent. The Bank Nifty index opened on a negative note, remained under pressure throughout the day and settled on a negative note at 50,092.

Tanvi Kanchan, head, UAE Business and Strategy, Anand Rathi Shares and Stock Brokers, said broader indices traded at a negative zone, emulating the global indices after the Nasdaq and the S&P lost 3.2% in two trading days. Asian stocks stumbled on the backs of US economic slowdown, an extended rout in Japanese stock markets and rising tension in West Asia.

Analysts are of the view that this selloff is more of a short-term volatility by way of profit booking and is no indicator of any long-term panic mode set in the Indian equities. For investors looking at entering the equity market, a staggered entry during volatile periods can be considered.

Japan’s Nikkei index plunges 12.4%

• Japan’s benchmark stock index plunged 12.4 per cent on Monday. The Nikkei closed down 4,451.28 points at 31,458.42
• It had dropped 5.8 per cent on Friday, making this its worst two-day decline ever. European markets also opened lower on Monday
• Germany’s DAX was down 2.3 per cent at 17,267.00. The CAC 40 in Paris lost 1.9 per cent to 7,114.33 and the FTSE 100 in London was 2.1 per cent lower at 8,004.19 PTI