Sinking to its lowest level in 21 months, the market benchmark Sensex today crashed 807 points to drop below 23,000-mark as concerns over global economy and mounting bad loans wiped off over Rs 3 lakh crore from the wealth of panic-stricken investors.
Marking the eighth biggest single-day fall, the Sensex closed 807.07 points down at 22,951.83 -- a new low for the index during the current NDA regime and the lowest since May 8, 2014 -- when the Lok Sabha elections were underway that saw BJP-led alliance sweeping to power.
Putting the blame for the fall on global factors, the government today sought to put a brave face saying the fall in market benchmarks this year has been just about 10 per cent as against much higher declines in other markets.
However, the Sensex has come off more than 23 per cent from its all-time peak of over 30,000, scaled nearly a year ago on March 4, 2015.
A fall of 20 per cent from an all-time peak is considered as a 'bear market' -- a term used for a sustained slide.
Experts said the global headwinds remain a major concern but the domestic woes, including ballooning NPAs being reported by the banks and weak quarterly earnings in various other sectors, have added to the market weakness.
In today's session itself, the total investor wealth -- measured in terms of cumulative value of all listed stocks on BSE -- slumped by over Rs 3 lakh crore -- taking the total loss since start of the week to nearly Rs 7 lakh crore.
Since the all-time peak, the total investors' wealth has come down by close to Rs 20 lakh crore and now stands at about Rs 86 lakh crore.
"Relentless selling in the stock market is coming from redemption pressures, margin calls, crude slumping to multi- year lows, depreciating rupee against dollar and disappointing earnings," said Gaurav Jain, Director of Hem Securities.
NSE's Nifty also saw its biggest fall in six months to end at a 21-month low of 6,976.35.
Besides, gold prices soared to a 18-month high, tracking gains in global markets as safe assets' appeal rose while the rupee also regained 68-mark against the US dollar.
Weak earnings from public and private sectors banks on account of higher provisioning for bad loans mainly affected the market sentiment, a broker said.
SBI today reported a plunge of over 67 per cent in its third-quarter net profits while a number of other banks have also reported weak results on worsening bad loan scenario.
Other Asian markets also ended weak following US Federal Reserve Janet Yellen's testimony which suggested that the bank is likely to continue on the gradual rate hike path.Rupee
Rupee slides to 68.3 to US dollar
The rupee ended lower by 45 paise to more than 29-month low against the American currency to 68.30 per dollar on fresh dollar demand from banks and importers in view of sharp fall in equities amidst foreign capital outflows.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 751.33 crs yesterday, as per provisional data released by the stock exchanges.
The Indian unit resumed lower at 67.95 per dollar as against Wednesday's closing level of 67.85 at the Interbank Foreign Exchange (Forex) market and fell further to 68.3450 per dollar before finishing at more than 29-month low at 68.30 per dollar, showing a loss of 45 paise or 0.66 per cent.
The rupee had last ended at 68.80 per dollar on August 28, 2013 after touching 68.85 on the same day during the intra-day trade.
The domestic unit moved in a range of 67.90 and 68.3450 per dollar during the day.
The dollar index was down by 0.30 per cent against a basket of six currencies in the late Asian trade.
Overseas, dollar hit a 15-month low against the yen today after comments from Federal Reserve Chair Janet Yellen gave investors no reason to change their minds that the next rate hike will be a long time coming.
Meanwhile, the Indian benchmark Sensex ended lower by 807.07 points or 3.40 per cent today.
Mr. Pramit Brahmbhatt of Veracity Financial Services said," As expected rupee opened on a negative note and since opening trades we saw rupee depreciating. We saw loss in rupee extending as rupee breached lower level of 68. The fall in rupee was mainly on back of global as well as domestic equity market SELL-OFF .
Our benchmark index NIFTY lost nearly 240 points for the day. Trading range for spot USD/INR pair is expected to be within 67.8 to 68.7 levels.
Meanwhile, US crude tumbled below USD 27 a barrel in Asia today as the oversaturated market struggled to cope with high inventories in the United States and an increased output from OPEC.
In forward market, premium for dollar showed a mixed trend due uneven demand and supply transactions.
The benchmark six-month premium payable in July closed lower at 198-200 paise as against 200-202 paise yesterday while far forward January 2017 contract firmed up to 412.5- 414.5 paise from 411-413 paise.
The RBI fixed the reference rate for the dollar at 68.0155 and for the euro at 76.8439.
In cross-currency trades, the rupee dropped further against the pound sterling to end at 98.59 from 98.46 yesterday and also fell further against the euro to 77.27 from 76.39.
The domestic unit moved down against the yen to 61.21 from 59.03 per 100 yen.