BSE Stocks Plunge: Sensex Drops 2,222 Points

New Delhi, Aug 5 (PTI) As many as 3,414 stocks declined on the BSE on Monday in tandem with a mayhem in the domestic markets where the benchmark Sensex plunged 2,222.55 points.

The 30-share BSE benchmark tanked 2,222.55 points or 2.74 per cent to settle at 78,759.40. During the day, it slumped 2,686.09 points or 3.31 per cent to 78,295.86.

"The market witnessed drawdown today, driven by sharp cuts in markets such has Nikkei, Taiwan and Korea. The data on US employment is not encouraging either. These developments are causing panic, particularly as Indian markets, which trade at high valuations, could also see some sell-offs," Vinit Sambre, Head – Equities at DSP Mutual Fund, said.

Reflecting the weak trend in equities, as many as 3,414 stocks declined on the BSE while 664 advanced and 111 remained unchanged.

On the BSE, the top losers were Kirloskar Brothers which tanked 12.37 per cent, followed by Samvardhana Motherson International (9.21 per cent), Thermax (9.14 per cent), Reliance Infrastructure (8.94 per cent) and Computer Age Management Services (8.62 per cent).

On the contrary, Glenmark Life Sciences jumped 6.21 per cent, Cera Sanitaryware climbed 5.72 per cent, Dr. Lal PathLabs (2.20 per cent), PCBL Ltd (1.83 per cent) and Vijaya Diagnostic Centre (1.76 per cent).

"Fears of the US staring at a recession have intensified after the July jobs report, which threw a big downside surprise with fairly broad-based signs of weakening. Geopolitical tensions have weighed quite considerably on the market sentiment as concern of retaliation by Iran and its regional allies on Israel and US and other western allies getting involved in support of Israel may lead to a full-fledged war in the region," Ajit Banerjee, Chief Investment Office of Shriram Life Insurance Co, said.

The Bank of Japan announced a rate hike and signalled more hikes in the future, he added.

"They also announced a reduction in bond purchases. On the other side, expectations of a rate cut in the US contributed to a weaker dollar, making the yen stronger comparatively, which has led to an unwinding of Yen carry trades as the Yen has appreciated. When Yen strengthens, the carry trades become less profitable and investors rush to unwind their trades and avoid losses," Banerjee added.

All indices ended lower. Services index nosedived 4.56 per cent, utilities tanked 4.30 per cent, realty 4.25 per cent, capital goods 4.13 per cent, industrials 4.08 per cent, power 3.91 per cent, oil & gas 3.88 per cent and commodities 3.82 per cent.

In the broader market, the BSE smallcap gauge dropped 4.21 per cent and midcap index plummeted 3.60 per cent.

At the NSE, 2,452 stocks declined while 332 advanced and 74 remained unchanged.