Chinese Effect: Stock Market slides down

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Mumbai: Concerns over stricter norms for participatory notes and slump in Chinese stock market pulled down the share indices. AS a result benchmark BSE Sensex plunged nearly 550 points and the NSE Nifty dropped below the 8,400-level. European stocks and major commodity prices fell hard on Monday as concerns over China dominated financial markets in the wake of the biggest drop in Shanghai shares in eight years. The 30-share index, which slumped below the crucial 28,000-mark in early trade, tumbled 550.93 points or 1.96 per cent to 27,561.38 points. On the otherhand the 50-share NSE index Nifty dropped 160.55 points or 1.88 per cent to 8,361.

All BSE sectoral indices ended significantly in the red. Markets plunged amid fears that the government may accept Supreme Court-appointed, Special Investigation Team (SIT) recommendations of stricter norms for participatory notes (P-notes) on markets, equity brokers said. Sentiments were also hit following a sell-off in other Asian markets with over 8 per cent crash in Shanghai on worries that the Chinese economy, the world’s second largest, is heading for a sharp slowdown, they said. Fresh weakness in the rupee which depreciated by 7 paise to Rs 64.11 (intra-session) against the dollar too dampened the trading sentiment, brokers said. Meanwhile, Finance Minister Arun Jaitley today assured the government will not take any “knee-jerk” reaction that will adversely impact the country’s investment climate.

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European equities started the week on a downbeat note, heading for their fifth straight daily fall, with worries over China’s growth prospects overshadowing some forecast-beating corporate results. The FTSEurofirst 300 index was down 1.4 per cent at 0722 GMT, with benchmark indexes in Paris and Frankfurt broadly in line. UK stocks outperformed slightly, with the battered mining sector staging a rebound after a volatile week despite metal prices languishing near multi-year lows. Among other Asian markets, Shanghai Composite index was down almost 8.48 per cent, Japan’s Nikkei tumbled 0.9 per cent and Hong Kong’s Hang Seng plunged 3.11 per cent.