Domestic benchmark index BSE Sensex tanked over 500 points in the early trade on Monday and Nifty 50 index slipped below 8,700-mark on account of feeble global cues. Later, the 30-share index closed 443.71 points down at 28353.54, while Nifty index settled 151.10 points down at 8,715. Among the 51 components in the Nifty index, 46 stocks ended the day in red with Hindalco, YES Bank, Tata Steel, Bank of Baroda and Ambuja Cement slid between 4.63 per cent and 9 per cent. On the other hand Infosys, Tech Mahindra, Wipro, TCS and Reliance Industries gained between 0.22 per cent and 1.89 per cent.
Below are 7 reasons why Sensex plunged over 500 points intraday in the early trade:
1) Asian markets: Hang Seng tumbled 809 points on Monday. Nikkei and Shanghai settled lower by 293 points and 56.88 points, respectively. Nikkei slipped over 3 per cent as the yen firmed due to risk aversion and yields on 10-year JGBs briefly hit the highest since March before paring losses.
2) Markets sentiments also dampened by rising bond yields and talks that the Federal Reserve might be serious about lifting US interest rates as early as next week.
3) Weak rupee further impacted domestic equity markets on Monday. At 3.30 pm, the local currency was trading nearly 25 paise down at 66.93 against dollar.
4) American markets witnessed the biggest fall on Friday since Britain decided to leave the European Union. The Dow Jones Industrial Average slipped 394.46 points, or 2.1 per cent, to 18,085.45 on Friday. Standard & Poor’s 500 index shed 53.49 points, or 2.5 per cent, to 2,127.81. Nasdaq composite also declined 133.57 points, or 2.5 per cent, to 5,125.91.
5) Heavy selling in auto, metal, real estate and banking stocks further dampened market sentiments in the early trade.
6) Traders also remained cautious ahead of the Index of Industrial Production (IIP) data to be released on Monday after market hours.
7) European markets also started the day on weak note following developed markets, which further kept market under pressure.