The Sensex crashed to its lowest mark in six-and-a-half months?bank and real estate stocks pummelled the most?as global credit losses widened and crude oil futures traded at a record $110.70 a barrel in New York on Thursday.
The benchmark index of the BSE, after opening lower than its previous close, slid a further 770.63 points, or 4.78%, to 15,357.35 points. The broader S&P CNX Nifty of NSE lost 248.40 points, or 5.10%, to 4,623.60 points. Both indices posted their sixth steepest intra-day falls ever on Thursday.
ICICI Bank Ltd dropped to a six-and-a-half month low of Rs 837.9. Indian Oil Corporation slumped to a one-month low. DLF Ltd, the nation?s largest real-estate developer, saw the sharpest decline since trading debuted last year. It fell by Rs 105.95, or 15%, to Rs 606.75. The exchange?s gauge for the real estate industry fell 11.6%, leading the fall in the other 12 industry indices.
Asian stocks sank the most in a week after the dollar tumbled below 100 yen for the first time since 1995. Hong Kong?s Hang Seng pared 4.79% to close at 22,301.64 points, while the Shanghai Composite lost 2.43% to end at 3,971.26 points. The stronger yen resulted in the Nikkei 225 closing at 12,433.44 points, losing 427.69 points, or 3.33%, as most exporter stocks were severely battered.
Ambareesh Baliga, vice-president at Karvy Stock Broking, said, ?Markets are showing a complete lack of confidence. Though the US Fed meet is scheduled next week and we are expecting a 50-75-basis point cut, but unless fresh money starts flowing in, Indian markets will remain volatile.?
As stocks slumped, the rupee fell and crude oil hit a record high, fuelling speculation that refiners would need to buy more dollars to pay for imports. The partially convertible rupee ended at 40.425/435 a dollar, off an intra-day low of 40.60, but weaker than Wednesday?s close of 40.33/34. The currency also weakened on concern that global funds would reduce their equity holdings.
Stocks of public sector oil companies, which are barred by the government from raising retail fuel prices as it helps to partially control inflation, declined. Crude oil prices are expected to remain firm over the next few days on a weakening dollar and steady buying support.
On the MCX, the active March expiry crude oil contract was traded on Thursday at Rs 4,430 a barrel, a new high level on continued buying support. Gold also rose to a record in London and approached $1,000 an ounce on speculation that the credit market turmoil would spur demand for the metal as a haven from declines in stocks and the dollar. The MSCI World Index, a benchmark for stock markets in developed nations, dropped 0.6%, bringing the decline this year to about 10%.