>Fears of an economic slowdown in China sent equity markets crashing across the globe and India was no exception. The benchmark 30-share Sensex lost 537.55 points to close at 25,623.35 — its biggest single-day percentage loss in four months. The broader Nifty lost 171.90 points to end the day at 7,791.30.
The > fall in the Indian market was across the board with more than 1,600 stocks losing ground, as against 1,277 gainers. All the sectoral and broader indices ended the day in the negative category.
Earlier in the day, the Shanghai Composite index of China lost 6.86 per cent or 243 points, after data showed that the Caixin Purchasing Managers' Index (PMI) fell to 48.2 in December from 48.6 in the previous month, The Caixin PMI reflects manufacturing activity with a focus on small and medium enterprises (SMEs) and any level below 50 is looked upon as contraction.
The fall in the Chinese index led to the authorities suspending trading activities.
“There was an ongoing fear of a China slowdown, which has continued in the New Year. The PMI data was weak which also led to a slight devaluation in the yuan. There was already some amount of nervousness in the market. Global markets, including India, will now wait for some reassuring signals from China. They are certainly not getting it now,” said Andrew Holland, Chief Executive Officer (CEO), Ambit Capital.
Among the leading global indices Nikkei lost 3.06 per cent while Hang Seng and Kospi declined by 2.68 per cent and 2.31 per cent, respectively. Most of the European benchmarks were down by more than two per cent during afternoon trades.
The impact of the fall in India could be gauged by the fact that there were 13 Sensex constituents that lost more than two per cent each. Infosys Technologies, Tata Motors, Bharti Airtel, Bhel, HDFC, State Bank of India and L&T all lost in the range of about two to six per cent each.
Rupee close to two month low The >rupee weakened against the dollar today amid weak Asian currency and equity markets.
The currency closed at 66.62 per dollar as compared to 66.15 of the previous close. The rupee depreciated 0.7 per cent against the dollar — the most in two months. Emerging-market stocks and currencies slumped as manufacturing in China weakened for a fifth straight month, the longest such streak since 2009.
Dealers said the State-run banks sold dollars on behalf of the central bank. They estimates about $ 500 million were sold by the central bank.
“The market opened today after a three-day holiday and there were no inflows that could have supported the rupee,” said a dealer with a state-run bank.
Rupee is likely to recovery Tuesday as inflows are expected to come as auction for FII debt limit has seen robust demand. However, the recovery could be temporary if the dollar continues to strengthen against all other currencies, dealers said.
