Stock markets in India were hit amid fears over stricter norms on participatory notes (PNs) and a sharp setback in Chinese stock markets. The BSE Sensex lost 551 points to end at 27561.38, while the CNX Nifty fell 160.55 points to close at 8361.
The Asian markets saw a drop of eight per cent with a major fall in the Chinese markets due to low demand and weaker industrial performance.
Despite the Government’s stimulus efforts, China’s stock markets crashed again on Monday. The Shanghai Composite Index fell by 8.5 per cent at 3725.56, its biggest percentage fall since February 27, 2007. The Shenzhen A-shares index also lost 7 per cent. European stocks fell hard on Monday as concerns over China dominated financial markets in the wake of the biggest drop in Shanghai shares.
Key indices in Germany, the U.K. and France were down. In other Asian markets, key benchmark indices in Singapore, Indonesia, Japan, South Korea and Taiwan were also down.
Nearer home, there were fears that the market regulator SEBI (Securities and Exchange Board of India) may tighten rules on Participatory Notes (PNs) in the wake of a report by a special investigations team on black money.
(PNs are popular offshore derivative instruments used by foreign portfolio investors to invest in Indian stocks).
In the foreign exchange market, the rupee lost 12 paise to end at 64.16 a dollar on Monday as compared to 64.04 on Friday last.
“A confluence of domestic and global factors led to a sell off today,” said Amar Ambani, Head of Research, IIFL
