Worst crash of 2016: Why Sensex went on a free fall

The NSE Nifty too plunged headlong as it went below the 7,600-mark by falling 172.70 points, or 2.23 percent, on massive selling across sectors.

Last Updated: Jan 07, 2016, 17:49 PM IST
Worst crash of 2016: Why Sensex went on a free fall

Zee Media Bureau

In the worst crash this year, the benchmark Sensex Thursday broke below the 25,000-level by tanking about 555 points to close at 24,851.83, a 19-month low.The NSE Nifty too plunged headlong as it went below the 7,600-mark by falling 172.70 points, or 2.23 percent, on massive selling across sectors.

Here are the key reasons of today's free fall :

-Sustained selling by participants amid a weak trend in other global markets.

-China's slowdown: The fall came amid worries over a slowing growth in the world's second-largest economy, which has roiled investors worldwide, and pressure on its currency from capital outflows.

-China's Yuan devaluation: China's central bank again surprised markets by setting onshore yuan's value lower to the US dollar, sending the domestic stock markets tumbling.

-Fall in crude prices: Sentiment further got dampened after global crude prices softened to multi-year lows following China's weakening currency and rising global stock reserve. The US benchmark crude contract slid below USD 34 a barrel while Brent fell to USD 33.61 per barrel.

-In addition, weakness in the rupee against the American currency too weighed on the sentiment.

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