Mumbai: It was carnage on Friday on Dalal Street, no thanks to Britain voting to leave the European Union at a time when the world’s countries are interconnected like never before in the history of the world.
The benchmark Sensex plunged 604.51 points on Friday to end the day 26,397.71. This was its biggest single-day drop in nearly four months, as the shock result of the UK referendum sent markets around the world into a tailspin.
Total investor wealth, measured in terms of the cumulative market value of all listed stocks, tanked a whopping Rs 1.79 lakh crore.
The rupee, too, took a beating, plunging 96 paise against the US dollar in intra-day trading, to crash to below 68. An intervention by the RBI, to infuse liquidity into the market, helped the rupee recoup some of its losses.
Britain on Friday voted to leave the EU, in what’s a deadly blow to the 28-nation bloc. The shock result of the vote forced British Prime Minister David Cameron to announce he’s resigning.
The result of the referendum led to havoc in the world markets.
Japan’s Nikkei tumbled 7.92 per cent and Hong Kong’s Hang Seng fell 2.92 per cent. European stocks were trading lower with the London Stock Exchange’s FTSE index down 5 per cent after crashing 9 per cent in early trades.
Back home in India, domestic stocks, which had plunged close to 1,100 points in early trade, recouped some of their losses on value-buying in the pre-close session. Assurance from influential policymakers, including finance minister Arun Jaitley and RBI Governor Raghuram Rajan, also helped gaining back some confidence..
After opening lower at 26,367.48, the BSE Sensex continued to slide, as it was hit by plunging global markets. This made the index crack the 26,000-mark to touch a low of 25,911.33.
However, value-buying in key blue chips, helped the index recover somewhat to close the session 604.51 points down, or 2.24 per cent lower, at 26,397.71. This was the index’s weakest closing since February 11.
The 50-share nse Nifty, which cracked the 8,000-level to hit a low of 7,927.05 during the session, managed to recover part of its initial losses and settled 181.85 points or 2.20 per cent down at 8,088.60.
Companies with a large exposure to the UK – like Tata Motors, Tata Steel, Bharat Forge, Infosys, TCS, Hindalco and Tech Mahindra – which get a substantial proportion of their revenue in pounds, also ended in the red.
The fall was so widespread that 23 Sensex stocks ended the day in the red. These included Tata Motors, Tata Steel, L&T, ICICI Bank, ONGC, RIL, Axis Bank, SBI, TCS and Adani Ports which crashing up to 7.99 per cent.
Among BSE sectoral indices, realty suffered the most, by 3.74 per cent, followed by metal (3.59 pc), capital goods (3.30 pc), banking (2.69 pc), auto (2.63 pc), IT (2.13 pc), tech (2.01 pc) and oil&gas (1.82 pc).
Broader markets’ performance was also weak, with the BSE small-cap index falling 1.46 per cent and mid-cap down 1.07 per cent.