Sensex Plunges 500 Points, Nifty Breaches 7,800 as China Cracks 7%
Sensex crashes 400 points after 7 percent fall in China stocks.
The S&P BSE Sensex plunged over 500 points to below 26,000, tracking Asian markets which slumped after China factory activity contracted and the yuan weakened to near a five-year low.
The rout in other Asian markets saw the suspension of trading in the Chinese stocks markets after shares plunged about 7 percent, triggering lower circuits in the index.
The Nifty, also, came under pressure to break below its crucial support level of 7,800.
The breadth of the market was mixed with five of ten BSE stocks trading in the red.
The volatility index, India VIX, spiked over 13 per cent indicating increased volatility for the coming 30 days.
Among the sectoral indices, the BSE Telecom was the top sectoral loser, slipping 2.32 per cent.
Tata Steel and Bajaj Auto are only two stocks in green in the Sensex. Among losers are Bharti Airtel, ICICI Bank, Tata Motors, HDFC and Adani Ports.
Chinese stocks led stock markets in Asia Pacific lower after feeble manufacturing surveys revived concerns over the durability of the country’s economic recovery.
Chinese equities fell 7 percent after the country’s official manufacturing Purchasing Managers’ Index (PMI), a measure of factory activity, stood at 49.7 in December, which was in line with market expectations. On the other hand, the official non-manufacturing PMI was up 54.4, from November’s reading of 53.6. A reading below 50 indicates a contraction in activity on a monthly basis. The Chinese yuan dropped to a fresh five-year low against the US dollar in morning trade.
The rupee fell 17 paise to 66.31 against the US dollar in early trade on Monday after weak Chinese manufacturing PMI readings sparked selling across Asian currencies.
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