The benchmark BSE Sensex on plunged by 537.55 points on Monday, its biggest fall in more than three months, to crack below the 26,000-mark as worries over China’s economic slowdown and geopolitical tensions in the Middle East combined to spook investors.
In addition, domestic manufacturing sector output shrinking to a 28-month low in December and fresh weakness in the rupee, further accelerated selling activity in Mumbai.
Other Asian stocks, which opened on Monday after a long break, were on the receiving end after a private survey showed Chinese factory data contracted for a fifth straight month.
Consequently, Shanghai index plunged by more than 7% and trading was halted for the rest of the day.
A flare up in the Middle East after Saudi Arabia cut diplomatic ties with Iran following a row over Tehran’s execution of a Shia cleric also had its negative impact.
Moreover, global crude prices surged by 1.64% to $37.89 per barrel while in the local market, rupee weakened by 45 paise to 66.59 (intra-day) against the dollar.
From the onset, the BSE 30-share Sensex remained in the negative zone and its settled 537.55 points or 2.05% down at 25,623.35, its weakest closing since September 22.
The index had gained about 201 points in the previous two sessions.
The NSE Nifty fell below the 7,800-mark by losing 171.90 points or 2.16% to 7,791.30 after hovering between 7,937.55 and 7,781.10. The index had last logged its biggest single-day fall of 185.45 points on September 1.
As many as 27 scrips out of the 30-share Sensex pack ended lower.
The broader markets too came under selling pressure with the mid-cap index falling 1.20 per and small-cap dropping 1.11%.
Market heavyweights like Tata Motors suffered the most by tumbling 6.10% followed by Bharti Airtel fell 4.10%, Adani Ports (3.66%), BHEL (3.45%), HDFC (3.26%), SBI (2.94%), ICICI Bank (2.83%), L&T (2.58%), Lupin (2.58%), GAIL (2.43%), Axis Bank (2.35%) and Sun Pharma (2.10%).
In other Asian markets, Japan’s Nikkei tumbled 3.06% and Hong Kong’s Hang Seng lost 2.68%. European markets were also down in their early trade.
Meanwhile, foreign investors bought shares worth Rs 228.11 crore on Friday as per provisional data.