Blood bath on Indian bourses

The global market is reeling as bears enter with a cocktail of bad news. The fear of a reverse Yen carry trade, following an interest rate hike in Japan, was the initial catalyst. This was compounded by fears of a recession in the US after extremely poor jobs data, which spooked market sentiment - Santosh Meena, head (research), Swastika Investmart Ltd

Monday Mourning :

♦ All indices ended lower

♦ Markets across, US, EU and Asia in red

♦ Indian mkts tumbled over 5% on June 4, 2024 (poll results day)

♦ BSE Sensex plummeted 2,222.55 pts or 2.74% to month’s low of 78,759.40

♦ It’s worst single-day retreat since June 4, 2024

♦ During the day, Sensex tanked 2,686.09 pts or 3.31% to 78,295.86

♦ NSE Nifty slumped 662.10 pts or 2.68% to 24,055.60

♦ During the day, Nifty tumbled 824 pts or 3.33% to 23,893.70

♦ FIIs offloaded equities worth Rs3,310 cr on Friday

Mumbai: Stock markets crashed nearly three per cent on Monday due to across-the-board selling in banking, IT, metal and oil & gas shares following a global equity rout, wiping out more than Rs15 lakh crore of investor money in a single day.

The 30-share BSE Sensex plummeted 2,222.55 points or 2.74 per cent to settle at over a month’s low of 78,759.40, marking its worst single-day retreat since June 4, 2024. During the day, the index tanked 2,686.09 points or 3.31 per cent to 78,295.86. NSE Nifty slumped 662.10 points or 2.68 per cent to settle at more than a month’s low of 24,055.60 points. During the day, it tumbled 824 points or 3.33 per cent to 23,893.70.

In the broader market, the BSE smallcap gauge dropped 4.21 per cent and midcap index plummeted 3.60 per cent.

“The global market is reeling as bears enter with a cocktail of bad news. The fear of a reverse Yen carry trade, following an interest rate hike in Japan, was the initial catalyst. This was compounded by fears of a recession in the US after extremely poor jobs data, which spooked market sentiment,” said Santosh Meena, head (research), Swastika Investmart Ltd.

Nifty also saw its worst single-day fall since June 4, 2024, when markets crashed more than 5 per cent due to general election results. Sensex and Nifty had declined more than 1 per cent in the previous session on Friday. In two sessions to Monday, the key indices have corrected around 4 per cent.

“The global markets were jolted into a cautious mode by recessionary fears in the US following disappointing job statistics and unwinding of carry trade following the rapid rise of the yen. The effects were felt by the domestic market as well and are expected to impact in the near term,” said Vinod Nair, head (research), Geojit Financial Services.

“European stocks fell, extending last week’s decline amid a deepening global rout in equities and a rotation away from the technology shares that have powered this year’s rally,” said Deepak Jasani, head (retail research), HDFC Securities.

Services index nosedived 4.56 per cent, utilities tanked 4.30 per cent, realty by 4.25 per cent, capital goods by 4.13 per cent, industrials by 4.08 per cent, power by 3.91 per cent, oil & gas by 3.88 per cent and commodities by 3.82 per cent.

“The Bank of Japan’s rate hike has significantly impacted global markets, causing market to reconsider the financial landscape. Additionally, renewed speculation about a long-anticipated US recession has emerged, partly due to a slightly higher-than-expected unemployment rate,” adds Vikas V. Gupta, CEO & Chief Investment Strategist, OmniScience Capital.

An over 12 per cent plunge in Japan’s Nikkei and geopolitical tensions in the Middle East dented market sentiment, analysts said. In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled sharply lower. Japan’s benchmark stock index plunged 12.4 per cent on Monday, compounding a global market rout set off by investor concerns that the US economy could be headed for recession. A report on Friday showing hiring by US employers slowed last month by much more than expected convulsed financial markets, vanquishing the euphoria that had taken the Nikkei-225 to all-time highs of over 42,000 in recent weeks. 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. Its worst single-day rout was a plunge of 3,836 points, or 14.9 per cent, on October 19, 1987, a global markets crash that was dubbed ‘Black Monday,’ but proved to be only a temporary setback despite fears it might have augured a worldwide downturn. European markets were also trading with deep cuts. The US markets ended significantly lower on Friday.

Investors lose Rs 15 trillion

Investors lost more than Rs15 lakh crore in the market crash as the total valuation of BSE-listed companies dropped to Rs441.84 lakh crore on Monday. Investors lost Rs4.46 lakh crore on Friday, taking the total losses in two days to more than Rs19 lakh crore. At 11:30am, when markets at day’s low, the mcap fell over Rs17 lakh cr and later recovered.