The benchmark BSE Sensex extended losses for fourth day in a row and fell below the 25,000 mark by plunging below 400 points, while Nifty dipped below the 7,620 level on Thursday.
The BSE Sensex and NSE Nifty fell for fourth day in a row on Thursday, tumbling by over two percentage points as China accelerated the depreciation of the yuan, sparking sharp falls in regional equity and currency markets.
Markets ended at 4-month low as the benchmark BSE Sensex ended 554.50 points down at 24,851.83. NSE Nifty on the other hand plunged 172.70 down at 7,568.30.
Below are top 5 reasons why the stock market took a plunge on Thursday
1. China markets: Chinese stock markets closed for the day less than half an hour after opening on Thursday after shares fell more than seven per cent, triggering an automatic “circuit breaker”. Trading was halted, when the benchmark Shanghai Composite Index had slumped 7.32 per cent, or 245.95 points, to 3,115.89.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, had tumbled 8.35 per cent, or 178.08 points, to 1,955.88.
2. Devaluation of the yuan: The Chinese currency devaluation rekindled fears of a growth slowdown in the world’s second largest economy. China accelerated the depreciation of the yuan on Thursday, sending currencies across the region reeling and domestic stock markets tumbling, as investors feared the Asian giant was kicking off a trade war against its competitors.
3. Indian rupee depreciation: Sentiments were weighed down by the Indian rupee that depreciated by 10 paise at 66.92 against the US dollar in early trade.
4. US stock markets: The US markets ended in red, pressurised by continued concerns over global economic growth, low oil prices and increased geopolitical tensions. Asian markets were trading in red after China opted to keep guiding the yuan sharply lower, deepening concerns about the economy and the potential for competitive devaluations by other countries.
5. Crude oil: Brent crude futures fell to a fresh 11-year low on Thursday. A huge supply overhang and near-record output levels also continued to drag on oil prices.