A key Indian equities index fell below the 8,000-point mark in intra-day trading to its lowest since November 2005 as the bear hug continued on the eve of Diwali Monday on the back of overall panic and weak global cues.
The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened lower at 8,599.58 points and moved up to 8,739.48 points, some 15 minutes into trading. But nervousness set in soon after, and pulled the index down to 7,985.07 points 45 minutes post noon - the lowest point in three years.
At that level, the 30-share bellwether index was ruling at a loss of 715.64 points, or 8.22 percent.
Since then, the Sensex started recovering, to close at 8,509 points - a fall of 191.51 points or 2.2 percent.
The BSE mid-cap index, which opened at 3,081.72 points, closed at 2,966.23 points, a 4.18 percent dip.
The BSE small cap fell 182.99 points to 3,478.84 points, reflecting a fall of 5 percent.
At the National Stock Exchange (NSE), the broader-based 50-share S&P CNX Nifty closed Monday at 2,524.2 points, a loss of 2.31 percent.
Despite investor nervousness, Religare Securities president Amitabh Chakraborty was optimistic. “Right now the earnings of the Indian companies are good. The Indian equities market knows that the Indian economy will grow at 7 percent and the inflation would be lower next year," he said.
Chakraborty said the market would stabilise once the American economic numbers are known. “That will show whether there is to be a recession in the US. Once that is known, the market will factor those numbers and look forward.”
Added Apoorva Shah, head research (institutional equities), Prabhudas Lilladher: "It has been a continuation of what has been happening during the past few days."
"The Europeon market opened weak but recovered a bit. FIIs are selling in India and it is the time to buy stocks of companies involved in infrastructure, IT and banks."
Like him, Chetan Sehgal, a Delhi-based 21-year college student and part-time investor, believes the crash opens up an opportunity. “It's better to invest in the market now, when stock prices are low. In January, the Sensex was ruling at 21,000 points, now it is 8,000.”
Last week, large-scale selling by foreign institutional investors belied expectations of investors.
On top of that, the central bank, the Reserve Bank of India (RBI), kept all key rates unchanged in its mid-term policy review Oct 24. Plus, poor global cues played havoc with Indian markets.