Zee Media Bureau
New Delhi: Market benchmark Sensex heavily lost ground Wednesday and slumped by 262 points to hit a 21-month low. The NSE Nifty also fell to its lowest level in 21 months.
Here are the reasons why Sensex ended at 21-month low.
Turmoil in global economy
Mixed trends across global markets affected the market sentiments. Stock market has been impacted a lot as investors have fretted over a number of issues, including the fall in the price of oil to multi-year lows, a slowdown in China and whether many parts of the global economy will fall into recession and suffer a debilitating period of deflation, or falling prices.
Weak Asian cues
Weak Asian cues also impacted the negative sentiment in the stock market. Asian markets ended weak as concerns mount over global recession. Japan's Nikkei ended with losses of 2.31 percent adding to the 5.41 percent plunge on Tuesday. Singapore Straight Times also finished lower by 1.57 percent.
Banks bad loans
Hit by mounting bad loans, three public sector banks, Central Bank of India, Allahabad Bank and Dena Bank yesterday reported losses while Punjab National Bank posted a sharp decline in profit for the third quarter of 2015-16. PNB slumped by 9 percent, Central Bank sank 12.37 percent, Allahabad Bank shed 9.61 percent while was down 5.20 percent.
Weakness in the rupee against the American currency too weighed on the market sentiment. The rupee was lower by 8 paise at 67.98 against dollar in late morning trade.