The BSE Sensex and the National Stock Exchange Nifty 50 on Tuesday made considerable losses, taking cues from sharp plunges in other Asian markets that were affected by the Dow Jones in the United States. On Monday, Wall Street recorded its biggest decline since 2008.
Dow Jones, the benchmark share index in the US, lost 1,175 points on Monday – almost 400 points more than the last biggest decline in a single day during the financial crisis of 2008. The decline in percentage terms – 4.6% – was the biggest since August 2011, during the Eurozone sovereign debt crisis. As a result, Japan’s Nikkei dropped 4% in early trade on Tuesday and Australia’s S&P ASX 200 fell 3%.
The Sensex on Tuesday closed 561 points down at 34,195.94, and the Nifty 50 ended 168.30 points lower at 10,498.25. Within 10 minutes of opening in the morning, the 30-share index declined by nearly 1,300 points. At one point, both indices were over 2.5% lower than the previous close.
Tata Steel was the only gainer on the BSE Sensex. Tata Motors, Tata Consultancy Services and Kotak Mahindra were the biggest losers. The best performers on the Nifty 50 were Bajaj Finance, ICICI Bank, Tata Steel, Eicher Motors and Bharti Airtel. Stocks of Lupin Industries lost the most on the index, followed by Tata Motors, HCL, Tech Mahindra and TCS.
The rupee lost 0.2% to trade at 64.19 per US dollar, BloombergQuint reported.
While the losses were primarily triggered by the global markets, the Indian indices have been falling since the government announced the Budget for 2018-’19 on Thursday – the Centre proposed a 10% tax on long-term capital gains on equity gains above Rs 1 lakh. On Friday, the Sensex lost nearly 840 points, and the Nifty 50 had its biggest intra-day slump in more than a year.
However, Finance Secretary Hasmukh Adhia on Tuesday maintained that the stock market’s fall was “mainly because of a global shakeup”, ANI reported. “We are not living in an island, so there will be a ripple effect of what is happening in the world on Indian stock markets,” Adhia said, adding the “global meltdown in stock exchange came at very wrong time for us”.
On Monday, Finance Minister Arun Jaitley had said the markets were in a downward spiral because of global factors, not the long term capital gains tax.
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