Global chill sends 2000-pt shiver down Sensex

Dalal Street was flooded with sell orders, sending stocks down by five to 15 per cent. The market came off the lower level after trading was halted briefly twice due to technical glitches after the steep fall.

At one stage, the Sensex had plunged 2062.22 points, the biggest intra-day fall in the widely tracked index ever. Investors wealth — or market capitalisation — fell by a huge Rs 6,67,000 crore to Rs 59.59 lakh crore in a single day.

The slide for the sixth straight day prompted the Government to caution investors against market rumours, while blaming global uncertainties for the fall.

“Orderly growth of the capital market is a priority of the government. I want to assure the citizens of India that sustained growth of the market is a priority,” Prime Minister Manmohan Singh told reporters in New Delhi. Fundamentals of the Indian economy remain strong, he said.

The sharp fall was triggered by setback in global markets, selling by foreign institutional investors, mega IPOs and margin calls after a proposed US stimulus package failed to soothe fears that the US will tip into recession.

Other Asian markets reeled under huge losses. Hong Kong’s Hang Seng (down 5.49 per cent), South Korea’s Seoul Composite (down 2.95 per cent), Taiwan’s Taiwan Weighted (down 0.91 per cent), China’s Shanghai Composite (down 5.14 per cent) and Japan’s Nikkei 225 index (down 3.86 per cent) fell on global concerns.

On Friday, Dow Jones industrial average lost 60 points, or 0.49%, a 16-month low after Wall Street was disappointed by US president George Bush’s $150 billion package of tax cuts and other measures. Dismal reports on employment, retail sales, factory activity and housing construction this month suggested that the US, the world’s largest economy, may be heading into recession.

On a closing basis, Sensex’s previous biggest single day point fall was on May 18, 2006, when it plunged 826 points or 6.75% to 11,391, spooked by a government circular on taxing investment gains and heavy FII selling. With today’s fall, the BSE Sensex has eroded 3601.42 points or 16.98 per cent from a record high of 21,206.77 hit on January 10 this year. The broader CNX S&P Nifty declined 496.50 or 8.70 per cent to 5,208.80.

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