The Sensex tumbled again, only to recover after a 2.6 per cent – or 443 point – fall on Monday, but the saving grace was that the 30-share bencmark did far better than other Asian indices battered in the wake of concerns over the European economic crisis.
The Bombay Stock Exchange index echoed other Asian markets but survived the initial scare to close at 16,875 – 0.9 per cent down from the previous close.
Other Asian markets fell sharply with Shanghai Composite of China leading the pack with a fall of more than 5 per cent. A weakening euro was the major cause of concern for China whose export revenues can be hit by the weakening European currency.
Benchmark indices in Japan (2.2 per cent) and Hong Kong (2.1 per cent) fared better than China but India did even better.
But global markets recovered later on Monday as the euro steadied in Europe, giving some strength back to the Indian markets.
“The euro regained some steadiness as there is an expectation of some more remedial action on the ongoing crisis in Europe,” said Divyesh Shah, CEO, Indiabulls Securities.
While the centre of the crisis is Europe, Chinese markets have been the biggest losers over the past one-month with the Chinese Premier index—the Shanghai Composite—having fallen by 18.2 per cent during the period.
Apart from concerns over Europe, there is also talk of overheating in the Chinese economy and measures can be taken to slow down the pace of growth.
Experts expect the volatility to prevail for now, as clarity needs to emerge.
In India the biggest losers were the Oil & Gas and information technology sectors as their indices fell by 1.9 per cent and 1.8 per cent respectively.