Global uncertainties haunted Indian investors once again, forcing them to dump stocks. A selling avalanche triggered by the woes in the US housing loan segment sent world markets into a tailspin with the benchmark Sensex plunging by 615 points, or 3.96 per cent — the third biggest single-day point fall in the Sensex ever. The plunge, which came after Tuesday’s 290-point rally, made investors poorer by Rs 1,81,000 crore with a drop in market capitalisation to Rs 43.50 lakh crore.

The Sensex, which opened with a downward gap of 200 points, kept on falling to close below the 15,000 level at 14,935.77 on intense selling pressure, with margin calls on leveraged positions accentuating the fall. Japan’s Nikkei dropped 2.2 per cent, Hong Kong’s Hang Seng slid 3.2 per cent and China’s Shanghai Composite tumbled 3.8 per cent while markets in South Korea and Taiwan fell 4 per cent.

Said Religare Enterprises Ltd national head (retail equity) Ashu Madan, “This correction is totally global driven and the financial markets worldwide are feeling the jitters led by the US markets on account of subprime lending. The immediate future depends on the outcome of the global markets, which is beyond anybody’s control. One must adopt absolute caution and should stay on the sidelines for things to get clear.” All the sectoral indices on the BSE and the NSE tumbled with shares from the real-estate pack suffering the most.

“The markets collapsed today mainly due to subprime market meltdown after a US mortgage lender said it had no cash to pay its creditors, and one of the leading US hedge funds warned that their funds may post losses amid growing trouble in the US subprime mortgage market,” said Dawnay Day AV Securities Pvt Ltd director Seshadri Bharathan.

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