China markets drag Sensex down, again
MUMBAI: The Bombay Stock Exchange saw Rs245,000 crore in investor wealth wiped out on Thursday in the sharpest fall in 19 months as the devaluation of the yuan by China, the world’s second largest economy, sparked fears of a global slowdown.
The devaluation — coming soon after the January 4 contraction in manufacturing, which accounts for more than a third of China’s GDP — spooked investors across the globe into selling their holdings and shifting to safer havens such as the dollar and gold, wiping off $2.5 trillion from global equities.
The Sensex hit an intra-day low of 24,825.70 — the lowest since June 5, 2014 — before closing at 24,851.83, down 554.50 points or 2.2%. The broader NSE Nifty 50 ended at 7,568.30, down 172.70 points or 2.2%. The government moved in to soothe frayed nerves. “Volatility is the new normal in the global economy. India has the inherent resilience to deal with emerging challenges. The government is watchful,” economic affairs secretary Shaktikanta Das said in a tweet.
Late in the evening, China suspended a new circuit breaker rule, which analysts said was partly responsible for the current volatility in markets.
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