Indian stock markets tumble on cues from China

In a repeat of the sequences that shook the world markets a few days back, Chinese stock market woes once again played havoc across the global equity indices, with Indian markets too tanking as the benchmark Sensex closed at a 19-month low below the 25,000-mark after lingering in negative territory through today's trading session.

Panic struck the local markets after China for the second time in less than three days halted trading at its Shanghai Composite index, which crashed over 7 per cent intra-day as the currency yuan went into a free fall.

Feeling the heat, local traders and domestic market participants also dumped stocks heavily, with commodity-related stocks on the Sensex taking a hard knock amid concerns over receding global input prices.

The 30-share Bombay Stock Exchange's S&P Sensex, after hitting the day's low of 24,825.70, down 580 points, ended the session at 24,851.83, down 554.50 points, or 2.2 per cent from Wednesday's close. So far, in the last four sessions, the Sensex has plunged a whopping 1,309 points, or 5.1 per cent.

The National Stock Exchange's broader 50-stock Nifty also reeled under selling pressure and ended below the psychological 7,600-mark at 7,568.30, down 172.70 points, or 2.2 per cent.

The local currency market also witnessed bouts of volatility, with the rupee dropping 11 paise intra-day to touch a low of 66.94 against the dollar before recovering some ground to trade 5 paise lower at 66.88.

Overseas investors continued to exit from emerging market economies, including India, having sold shares worth Rs1,062 crore in past three days till Wednesday even as domestic institutional investors remained net buyers to the tune of Rs367 crore.

Oil slumps
Taking its cue from the weak markets and likely softer demand, Brent crude has fallen to $33.2 / barrel, while even European markets opened in the red following the sell-off in the Asian markets.

Other Asian indices such as China's Hang Seng dropped 3.1 per cent and Japan's Nikkei shed 2.3 per cent. European markets too were down with key indices tumbling over 2-3 per cent in intra-day trade.

"We expect markets may find bottom at 7,500 levels and by the time of the union Budget, we expect the Nifty to touch 8,000, as India still remains one of the best performing economy amongst its global peers," said Ambareesh Baliga, an independent market analyst.

"Today's fall was mostly triggered by Chinese stock market crash, and Indian markets cannot be insulated from it as China is world's second largest economy. But with the Indian government looking to push infrastructure spending further and the Budget due in a month's time, we expect some strong measures which would provide buying opportunity for long-term investors," said Baliga.

Several frontline old economy stocks took a severe pounding. Shares of BHEL tanked nearly 7 per cent to Rs153.85, Tata Steel crashed 6.8 per cent to Rs250.10, Tata Motors plunged 6.1 per cent to Rs343.20, Axis Bank shed 5 per cent to Rs409.35, Maruti Suzuki declined 4.7 per cent to Rs4,266.55 and ONGC lost 4.5 per cent to Rs 226.70.

Other stocks such as SBI, Adani Ports, L&T, Bajaj Auto, Hindustan Unilever and NTPC ended over 2-3 per cent lower.