Mayhem at Dalal Street, Sensex tanks 723 points
Stock market was in for free fall today in India. This is the biggest fall in almost five months and must have come as a huge jolt to many people who were just looking at the rosy picture.
The worst sufferer was the BSE Sensex that came crashing down by as much as a massive 723 points to its lowest in nearly five months on strong selling on algorithmic trading platforms. It is clear that many investors, more importantly foreign investors were offloading their stocks in droves.
On the other hand there are also reports that the latest fall may be due to retrospective tax worries as well. When the market opened earlier today there was no sign that it will perform so badly. But the initial sell-off was actually caused by a slump in NSE index futures listed on the Singapore exchange, which are now trading at a discount to domestic NSE index futures.
Given the slump in the stock market, bond markets didnâ€™t remain unaffected. The sell-off signals the sudden bout of uncertainty gripping markets since April over the so-called minimum alternative tax (MAT) that is being demanded from some foreign investors.
While talking about the latest slup, Nilesh Dedhia, founder of NTD Trading told Reuters that â€œNifty was already below 200-day average and today it also broke Tuesday’s low which generated strong selling on algo platformsâ€. It is going to be a worrisome scenario for the government. Now traders claim that the initial falls were caused by heavy selling in Singapore which was later followed by over Rs 900 crore ($141.7 million) worth of Nifty May futures being sold in three minutes from 9.39 a.m.
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