Sensex crashes 538 pts, Nifty below 7800 on global meltdown

The Chinese yuan dropped to a fresh five-year low against the U.S. dollar in morning trade after China said manufacturing PMI contracted in December to 48.2, compared with 48.6 in November.

The benchmark BSE Sensex crashed below 26,000-level while the wider 50-scrip Nifty of the National Stock Exchange (NSE) plunged 171.90 points to end at 7,791.30 on Monday.

Amid near-absence of definite cues from overseas as most of the global markets closed due to year-end holiday’s, the RBI’s informal assurance on curbs on lender banks amid weak corporate balance sheets and bad loans and Finance Minister’s New-year wish-list on ensuring further ease in doing business with rolling out GST and rationalising direct taxes did perked-up investor’s sentiment. “Broader markets are also down in line with the headline indices”.

Overseas, China led decline in Asian markets after the latest data showed that the falling Caixin China manufacturing purchasing managers’ index (PMI) in December.

The market may see some more correction but big fall may not be seen as it has major support from domestic investors, feel experts. Despite this, he does not rule out Nifty revisiting 7500 level in the next three months, but the probability of it going below that is quite low.

Among other Asian markets, Japan’s Nikkei plunged 2.59 per cent, while Hong Kong’s Hang Seng was down by 1.22 per cent in early trade today. However, service providers remain defiant and say compensation to subscribers will be paid only after court orders them to do so. On the flip side, Tata Motors down by 6.10%, Bharti Airtel down by 4.10%, Adani Ports &Special down by 3.66%, BHEL down by 3.45% and HDFC down by 3.26% were the top losers.

The market breadth was negative as about 1598 shares declined against 1293 advancing shares on the Bombay Stock Exchange.