India's benchmark sensitive index (Sensex) plunged 11 per cent, the most in 16 years, tracking a sell-off in the global markets, and also as the Reserve Bank of India (RBI) failed to announce additional measures in its half-yearly policy to stimulate the economy.
The BSE benchmark index, Sensex closed at 8,701.07 points, down 1,070.63 points or 10.96 per cent. The 50-share S&P CNX Nifty closed at 2,584 points, down 359 points or 12.2 per cent.
Friday's drop in the market shaved off Rs 324,000 crore worth of market capitalisation just a few days before Diwali. In this week so far, the Sensex fell almost 13 per cent. The broad-based Nifty-50 shed 490 points or nearly 16 per cent this week.
The Sensex has fallen more the 10 per cent in a day only three times in the last 20 years. On December 21, 1990, the Sensex fell 199.99 points or 16.19 per cent to 1,034.96. Later, on April 28, 1992, the index fell 12.77 per cent or 570.42 points to 3,896.89. It tumbled 11.14 per cent to 4,505.16 on May 17, 2004.
In terms of points, Friday's fall — the steepest in Asia — was second only to the 1,408-point drop on January 21 this year.
The pressure on the domestic bourses was sharpened by the selling saga in east Asia early this morning , amid reports that Britain and the US were heading towards recession. In Japan, the Nikkei plunged to its lowest level since April 2003.
| TOP SENSEX LOSERS | ||
| Share price in Rs | Oct 24,08 | % Chg* |
| DLF | 203.90 | -23.96 |
| Ranbaxy Labs | 188.95 | -17.83 |
| Hindalco | 43.35 | -17.82 |
| Tata Motors | 162.75 | -16.54 |
| Reliance Ind | 1015.50 | -16.44 |
| Mah & Mah | 287.40 | -16.04 |
| Reliance Commun | 193.40 | -15.93 |
| ICICI Bank | 310.00 | -15.20 |
| ONGC | 659.55 | -15.01 |
| Sterlite Ind | 208.65 | -14.94 |
In Europe, major exchanges opened with falls of around 5 per cent and slipped some more.
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The Dow Jones Industrial Average on Friday dropped 349.97 points, down 4.03 per cent at 2.23 pm Eastern Time.
“This is an auction of shares and not normal market activity. Indian investors don't have to join this auction because the sale prices at auctions don’t represent true values,'' said Vallabh Bhansali, chairman, ENAM Group. “Hedge funds and FIIs are compelled to sell to generate cash and meet redemption pressures.''
Sectors worst hit on Friday included realty (down 24.39 per cent to 1,743.27 points), oil and gas (down 14.97 per cent to 5,151.64 points) and banks (down 12.62 per cent to 4,649.87 points).
There were no gainers among the index stocks while DLF (down 23.96 per cent to Rs 203.9 a share), Ranbaxy Laboratories (down 17.83 per cent to Rs 188.95 a share) and Hindalco Industries (down 17.82 per cent to Rs 43.35 a share) were among the top losers. Only one large-cap company – Container Corporation – that ended with gains, albeit a meagre 45 paise.
Total turnover in the market was Rs 15,440 crore in the cash segment. In the derivatives segment it was Rs 52,484 crore. Market breadth was extremely weak with 260 stocks on the advancing side and 2,322 stocks declining.
Foreign institutional investors (FII) sold equities worth Rs 1431 crore while domestic institutional investors bought equities worth Rs 514 crore, according to provisional data.
Still, a few brave investors sensed an opportunity and bought stocks amid the crash. “We have been selectively buying where we find attractive valuations. We have not seen any redemption in our equity schemes but have seen inflows through the systematic investment plan (SIP) route," said Achal Kumar Gupta, managing director of SBI mutual fund.