Sensex plunges over 1,000 pts, does U-turn, closes down by 280 points; 5 key points to note

In a horrific day of frantic trading, Sensex managed to cut some losses by the end of  trading hours on Friday after witnessing a panic sell-off in the second half of the session. The index suffered a massive over 1000 points decline on Dalal Street, for a host of reasons. However, it managed to end at 36,841.60,  below by 279.62 points or 0.75%, whereas the Nifty 50 finished at 11,143.10, lower by 91.25 points or 0.81%. The decline in Indian markets happened despite global peers showing a positive performance today. In fact, the Asian stocks recorded strong gains for the day, with the China’s Shanghai Composite clocking its best weekly run in more than two years. 

Here are 5 reasons that triggered investor panic in Sensex. 

Big players turned losers! 

Large cap stocks were major losers on Sensex with Yes Bank taking the top spot plunging by 28.71% ending at Rs 227.05 per piece. Today, the bank's share price had even tumbled by over 34% due to MD & CEO Rana Kapoor's exit in less than 5 months. Yes Bank was joined by Kotak Bank as it plunged by 3.86% at Rs 1179.65 per piece, followed by Adani Ports at Rs 362 per piece, down 2.94%, IndusInd Bank at Rs 1761.70 per piece, down 2.38%, Maruti at Rs 8039.55 per piece, below by 2.04% and Infosys at Rs 706.30 per piece,  lower by 1.96%. 

Other companies were Sun Pharma, Coal India, Hindustan Unilever, Axis Bank, NTPC, Tata Motors, ICICI Bank and SBI ending negative in the range of 0.50% to 2%. 

Banking stocks bloodbath! 

The S&P BSE Bankex index saw its worst nightmare today, as it gave away massive 926.19 points or 3.13% ending at 28,702.03. 

Almost every stock in this index saw heavy selling pressure with, Yes Bank taking lead finishing at Rs 227.05 per piece, down 28.71%. This was followed by PNB at Rs 72.80 per piece, down 8.20%, Bank of Baroda at Rs 111.65 per piece, below by 4%, Kotak Bank at Rs 1179.85 per piece, lower by 3.86%, IndusInd Bank at Rs 1761.70 per piece, below by 2.38% and Federal Bank at Rs 73.55 per piece, down by 2%. 

It was only HDFC Bank that saw positive ending on this index at Rs 1968.85 per piece up 0.35%. 

Auto, IT, Pharma added more pain! 

Apart from banking stocks, it was auto, IT and pharma that pushed Sensex down the cliff. 

S&P BSE Auto index tumbled by 276.89 points or 1.18% completing at 23274.84.  Meanwhile, S&P BSE Healthcare finished at 15588.83, below by 263.43 points or 1.66%. 

As for S&P IT, the index finished at 15,469.67, below by 169.03 points or 1.08%. 

No love for small caps! 

Among the indices on Sensex, it was BSE Small Cap that was least preferred by investors in today’s trading session. The index took massive beating and finished at 15,763.10 below 487.86 points or 3%. 

The index was dragged down by losers like Dewan Housing at Rs 351.55 per piece, down 42.43%, followed by Infibeam at Rs 181.35 per piece (22.76%), GPT Infra at RS 105.95 (18.75%), IL&FS Investment at Rs 7.36 per piece (16.08%), IL&FS Transportation at Rs 20.05 per piece (15.93%), Indiabulls Real estate at Rs 123.05 per piece (13.54%), RPP Infra at Rs 164.15 per piece (13.13%), JP Associate at Rs 8.30 per piece (12.63%), DB Realty at Rs 21.95 per piece (12.38%) and HCC at Rs 12.23 per piece (12.20%). 

Rupee 

Moreover, the Indian rupee continued to depreciate against US benchmark dollar index at interbank forex market. The domestic currency finished at 72.185 higher by 0.460 points or 0.64% against dollar, as per investing.com. 

Talking about today’s market performance, Jagannadham Thunuguntla,  Sr. VP and Head of Research (Wealth),  Centrum Broking Limited said, "It was gut wrenching day in Indian market today, with free fall across the market caps and sectors, with almost no place to hide.”

Thunuguntla adds, “The day started with ‘Yes Bank’ free fall, but by end of the day, there were so many such events. The macro meltdown in terms of relentless rupee weak weakness and bond yield hardening has finally shown-up its impact in full vigour on the market."

During the week, Sensex has lost a hefty 1,249.04 points, or 3.28%, while the NSE Nifty fell 372.10 points, or 3.23%.