Bloodbath on Dalal Street, Sensex sinks

Tribune News Service

New Delhi, February 11

It was a bloodbath on the Dalal Street today with the BSE Sensex plummeting by over 800 points to its lowest level in 21 months wiping out Rs 3 lakh crore in investor wealth.

The Sensex crashed 807 points to drop below 23,000-mark on fears of a looming global recession, uncertainty over US interest rates and mounting bad loans in public sector banks.

In its worst fall in the past six months and the eighth biggest single-day fall, the Sensex closed 807.07 points down at 22,951 points, a new low for the index during the current NDA regime and the lowest since May 8, 2014 when the Lok Sabha elections were underway that saw BJP-led alliance sweeping to power.

The Finance Ministry’s attempt to calm down the markets did not seem to work. Putting the blame for the market fall on global factors, the government today sought to put a brave face saying the fall in market benchmarks this year has been just about 10% as against much higher declines in other markets.

However, the Sensex has come off more than 23% from its all-time peak of over 30,000, scaled nearly a year ago on March 4, 2015.

Analysts said concerns of a global economic slowdown are mounting. Shreyash Devalkar, Fund Manager – Equities, BNP Paribas Mutual Fund, said the colour of the day was red as the selling rout of the previous three sessions intensified today, pushing key benchmark indices in India to trade at 21-month low.

“Weakness in global stocks hit domestic sentiment adversely, dragging down both the Sensex and the Nifty by more than 3%. As concerns over a global economic slowdown seem to be mounting, the US Federal Reserve chief Janet Yellen’s congressional testimony yesterday served to stoke investor fears further as she warned against the impact of a global financial market turbulence on US growth”, he added.

With multiple factors at play, stock markets are going down in a free fall. Gaurav Jain, Director, Hem Securities, said the relentless selling in the stock market is coming from redemption pressures, margin calls, crude slumping to multi-year lows, depreciating rupee against dollar and disappointing earnings.

Dipen Shah, senior VP and Head of Private Client Group Research, Kotak Securities, said the markets fell steeply on the back of continuing concerns about a global slowdown and the consequent impact on the financial sector. The US Fed also did not provide any further clarity on the possible interest rate movements. Quarterly results declared over the past few days have also not met up to the muted expectations and that also impacted sentiments.