The benchmark Sensex of the Bombay Stock Exchange tanked 702 points intra-day on Friday, before recovering somewhat to close at a 14-month low of 17,306, down 387 points, or 2.2%, as investors pressed the panic-selling button on fears of a possible recession in the US and debt problems in the eurozone.
Worldwide, stocks sank for an eighth straight session, wiping $2.5 trillion off their value on the week; Indian investors lost Rs. 1.3 lakh crore as the markets went into a tailspin following global cues. The broader Nifty also plunged by 120.6 points, or 2.3% to close at 5,211.3.
IT stocks were the worst hit among sectoral losers on fears that a possible double-dip recession in the US could hurt their revenues. "There are fears of another recession in the US and a debt crisis in Europe," Infosys CEO and managing director S Gopalakrishnan told HT.
As investors moved money out of stocks into gold, the yellow metal touched an all-time high of Rs. 24,350 for 10 grams.
"This is nothing domestic," said finance minister Pranab Mukherjee, while trying to calm nerves.
"It is substantially due to external factors. Stock markets fell due to global factors like weak recovery in US and spread of debt burden in eurozone.
"The current volatility is temporary." Experts remained unshaken.
"Retail investors must continue to remain invested through systematic investment plan," ICICI direct managing director Anup Bagchi told HT.