The benchmark Sensex crashed by 1,624.51 points as investors lost nearly Rs 7 lakh crore in a single session.
It was a ‘Black Monday’ for stock markets the world over as billions of dollars of money was lost in a brutal carnage of madness on all stock exchanges of the world. Jeejeebhoy Towers was no exception and it was bloodbath at Dalal Street as Indian stock markets saw one of its worst ever days in its trading history. The benchmark Sensex Monday crashed by 1,624.51 points as investors lost nearly Rs 7 lakh crore in a single session amid concerns about slowdown in China, the world’s second largest economy. The intra-day fall was even larger at 1,741.35 points — the third biggest ever and highest in over seven years. Turmoil in the Chinese markets and the currency war that is being witnessed has spilled to most economies of the world and India too witnessed panic selling at the moment.
Finance Minister Arun Jaitley said the government and RBI were watching the situation and hoped that things will stabilise once the transient impact is over. He also laid emphasis on strengthening the domestic market to deal with the impact of global developments.
Jaitley said, “There has been for the last few days a great amount of turbulence which was being caused in the global markets. Obviously, that turbulence has had impact on Indian market itself. The factors responsible for this are entirely external. There is not a single domestic factor in India which has either contributed to it or added to it.”
RBI head Raghuram Rajan tried to allay fears saying the country has strong macroeconomic fundamentals and sufficient forex reserves to contain volatility. He said, “I just want to indicate that we have plenty of reserves which was USD 355 billion (at the last count), plus USD 25 billion that exist because some of our forward sales. We have got USD 380 billion to play with.”
S.N. Kabra, a reader said, “India has one of the largest democracies and economies of the world apart from having a large chunk of its population under the age of 35. The ‘Make in India’ idiom if put to reality can boost our economy multi-fold and let us all boycott foreign goods wherever we can to give a boost to the manufacturing and service sector of our country. When the going gets tough the tough gets going and I am sure this short term pain in our stock markets and economy would be overturned in the months to come. It is all a game of patience and only the brave hearts with a medium to short term outlook should be buying stocks at the moment!”
“Don’t think there is a bubble in the stock markets and the fall has been steep because stocks had gone up rapidly after the Modi government came to power. This is all price mechanism in a market where ups and downs are fairly common. Investors should keep their nerves and be invested in quality companies for a long time horizon to make a booty in the markets!” he added.
The BSE’s 30-share index closed the day at 25,741.56 points, down 5.94 percent (1624.51 points), as stocks across all sectors including energy, banking, auto, IT, infrastructure and real estate saw massive selling as investors turned jittery amid a global carnage.
The broader 50-share NSE Nifty too witnessed heavy selling pressure and plunged by 490.95 points to 7,809.00.
Asian markets were also in deep red with Shanghai shares closing more than 8 percent down, while European shares were also down close to 3 percent in their early trade.
