On one of the worst-ever days, Indian markets crashed on weak global markets and an unchanged rate policy from the RBI. The Sensex plunged 1,070 points, or 11 per cent, to close at 8,701, while Nifty lost 359 points to close below at 2,584.
In percentage terms, this was the second-biggest loss ever for Nifty and the third-biggest for the Sensex. This was the lowest closing for the Sensex since 24 November 2005.
“Funds are pouring out of emerging markets,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “A lot of money that flowed into the region during the last five years from the U.S. and Europe is being cashed out. The global crisis has come to Asia.”
The Indian central bank on Friday surprised the market by keeping its key rates unchanged in the mid-term review of annual monetary policy, which lowered economic growth projections to 7.5-8 per cent for 2008-09.
Among the Sensex scrips, realty major DLF was the biggest loser shedding nearly 24 per cent. Ranbaxy, Hindalco and Tata Motors were the other major losers, down more than 16.5 per cent each. Sensex heavyweight RIL touched the intra-day low of Rs 991 to end at 1015, 16.4 per cent lower.
Panic selling was seen across the board. Realty, oil and gas, banking and metalstocks were the worst hit, shedding more than 12 per cent each.
The BSE realty index plunged 24.4 per cent to end at 1,743 levels. Unitech was hammered very badly and it plunged 51.3 per cent. Among the other realty stocks, Orbit Corp, DLF and Parsvnath Developers lost over 20 per cent each.
The oil and gas index on BSE dropped 14.8 per cent. Essar Oil was the biggest loser in the pack, shedding 19.3 per cent.
Banking counters also took a huge hit on RBI’s policy. The BSE bankex fell over 12.6 per cent. Kotak Mahindra Bank was the biggest loser, down 20.7 per cent. OBC, ICICI Bank and Axis Bank each ended lower by over 14 per cent.
The metal index on the BSE slid 12 per cent to end at 4393 levels. Nalco, Hindalco and Welspun-Gujarat Stahl dropped more than 16 per cent each.
Among other key indices, the BSE midcap index ended 8.4 per cent lower while the small cap index lost 7.7 per cent. In the mid cap space, IVRCL Infra, UTV, IFCI and Kalyani Steels were the worst hit, down more than 24 per cent each.
Among the small cap stocks, Orbit Corp, Wire and Wireless India and Suashish Diamonds, closed 20 per cent down.
In Hong Kong, the Hang Seng fell 8.3 percent to 12,618. Markets in Thailand, Indonesia and the Philippines were also down sharply as investors bailed from emerging markets around the world to cut their exposure to risky assets and meet redemption needs at home.