Sensex plunges 500 points after China suspends trading for the day

India’s stock markets plunged around 2% on Monday, with the benchmark Sensex down almost 500 points in afternoon trading tracking steep losses in other Asian markets, as trading was halted in China for the first time after stocks there tumbled 7%

India’s stock markets plunged around 2% on Monday, with the benchmark Sensex down almost 500 points in afternoon trading tracking steep losses in other Asian markets, as trading was halted in China for the first time after stocks there tumbled 7%.

The BSE Sensex was trading down 493.05 points or 1.9% at 1.45 pm. The wider NSE Nifty declined 160.55 points or 2.02% at 7,802.65 points(Reuters)

China’s CSI300 share index slumped 7% on the first day of trading in 2016 after surveys released showed that China’s factory output had contracted in December and the yuan also weakened to a five-year low.

This led to selling pressure across Asian markets. The BSE Sensex was trading down 493.05 points or 1.9% at 1.45 pm. The wider NSE Nifty declined 160.55 points or 2.02% at 7,802.65 points. Japan’s Nikkei 225 was down 3.1%, Hong Kong’s Hang Seng slumped 2.6%, Korean Kospi declined 2.2% and Singapore’s Straits Times Index fell 1.8%.

“Equity markets are flashing deep red in the first trading session for 2016 as investors grapple with the middle east tension and weak Chinese manufacturing data. Weak commodity prices and slowing global growth will continue to haunt markets, at least in the first half, of 2016,” said Sageraj Bariya, senior analyst at East India Securities.

Of the 30-share Sensex, 28 stocks were in the red. Tata Motors was the biggest loser, declining 5.6%, followed by Bharti Airtel, which was down 4.6% and HDFC and Adani Ports were down about 3%.

Among the only gainers on the Sensex, Hindustan Unilever was up 0.7% and Wipro rose 0.1%.

“India remains a good house in a bad neighborhood, but at the same time valuations are expensive on a relative basis…So returns would be a function of uptick in corporate earnings trend and the fate of GST bill and other key economic reforms,” added Bariya.

European stocks also opened lower with Germany’s Dax down 3%, France’s CAC40 down 2.5% and London’s FTSE100 also declined 1.8%.