Sensex Sheds 855 Points, 7th Biggest One Day Slump in History

Amidst weak global signals and fears of a slowdown of growth around the world because of falling crude prices, Sensex fell by a huge 855 points today. This is the 7^th single day fall registered by Sensex in history. Experts feel that political instability in Greece also played its part in bringing the markets down in Asian markets. Sensex closed at 26987.46 to register a decline of 3.1% from the previous close. It was same with Nifty that lost 251.05 points to close at 8127.35. Nifty also lost 3% during the day.

7^th biggest slump in a single day

This is the biggest fall of the stock markets in India since 3 September 2013 when markets shrank amidst fears of a free fall of Rupee against the greenback. Analysts were predicting a slump of the markets for many days even though Nifty gained nearly 31.4% in this year alone. Their fears have come true with stock market tanking today, eroding the net worth of many big companies by hundreds of crores of rupees. Even the blue chip share of State Bank of India was not spared and it fell sharply. However, hopes of a recovery at the economic front and a slew of reforms initiated by the present government suggest that stock markets would be able to absorb this sudden slump and slowly limp back on the road to recovery. The key to recovery lies in the hands of foreign investors. It will spell doom for stock markets if they start to panic and withdraw their capital.

Deven Choksey, MD at KR Choksey Securities feels there is nothing to panic at the moment. “This fall is largely attributed to global factors including crude. I admit that it’s a sharp correction, but it will throw more opportunities for fresh money to come in,” Choksey said.

The continuously falling crude prices had started to raise fears about the health of not just Indian but global economy. Take a look at the major losers at Sensex today.

The situation in Greece added to the impact of falling crude prices

It was a cascading effect on Sensex as it could not face the falling international crude oil prices coupled with uncertainty in Greece. There are fears that Greece could default on its loans from world bodies and thereby also lose its status as a member of EU. Global investors turned averse to risk because of uncertainty in Greece. If international situation remains the same with crude oil prices also not showing any signs of recovery, it may take Indian stock markets longer to limp back to normal levels.