Press Trust of India
Mumbai, July 27: Mumbai: Markets Monday went into a free fall with benchmark Sensex crashing over 550 points, its second biggest single-day drop since June 2, to slip below 28,000 mark amid fears of tightening of P-notes rules while the rupee fell by 12 paise to close at 64.16 against the US dollar.
Gold, however, continued its Saturday’s rebound amid positive global cues as dollar weakened, raising appeal of the precious metal as an alternative investment. The weakness in global markets including a crash of over 8 per cent in Shanghai stocks and a weak trend at European markets in their early trade added to negative sentiments, brokers said. The 30-share BSE Sensex slipped below the 28,000-mark to settle at 27,561.38, a steep fall of 550.93 points, or 1.96 per cent, lower than its last close. The gauge has now lost 943.55 points in the last three sessions.
A sharp plunge in shares of Tata Steel, Hero MotoCorp, Hindalco, Axis Bank, ONGC, Bharti Airtel, Tata Motors and Lupin dragged down the key indices from their crucial levels. In the process, Rs 1.50 lakh crore was wiped off from the overall investor wealth on the BSE. The free fall in the stock market was primarily triggered over worries that stricter norms for participatory notes (P-notes) may hit foreign investments and a major slump in Shanghai stocks on concerns that the Chinese economy, the world’s second largest, is heading for a sharp slowdown. P-notes are a popular offshore derivative instrument used by overseas investors to investment in Indian stocks.
In the currency market, the rupee lost 12 paisa to close at a six-week low of 64.16 against the US dollar, further hurting the investor sentiments. The 50-share NSE Nifty also slipped below the 8,400-level by plunging 160.55 points to close at 8,361.00. Selling pressure was broad-based, while capital goods, metal, banking, power, realty, auto and energy stocks were the worst hit. In the bullion market, gold prices, however, went up as investors rushed for a safe haven amid pick up in buying by jewellers at prevailing levels and positive global cues. Globally, gold in Singapore advanced 0.5 per cent to $1,104.66 an ounce. Standard gold prices in Delhi rose Rs 90 to end at Rs 25,490 per 10 grams from previous closing level of Rs 25,400, while in Kolkata, it gained Rs 60 to settle the day at Rs 25,475 per ten grams.
