Mumbai : Further sell-off in Chinese stock market continued to give investors anxious moments as the benchmark BSE Sensex lost ground by 242 points to settle at 27,366.07, its lowest close in over two months.
The index at one point was down by over 450 points, tracking a massive sell-off in Asian markets after China PMI showed that factories shrank at the fastest pace in six and a half years, heightening concerns about the health of its economy.
However, indices ended off lows after the government said it was “favourably considering” the recommendations of the AP Shah committee on minimum alternate tax. Moreover, the revenue secretary said the government has no intention of banning participatory notes.
The rupee remained on a weak footing as it fell to a two-year low of 65.91 (intra-day), which led to heavy outflows by foreign investors. The currency fell by 29 paise to close at 65.83 against the US dollar on high demand for greenback from banks and importers.
This apart, simmering geopolitical tension between South and North Koreas and weakness in emerging market currencies complicated the scene.
“After a persistent selling, the markets edged lower as investors fretted over weakness in global stocks due to weak Chinese manufacturing data, which added to growing concerns over China’s economic slowdown and slide in commodities prices,” said Jayant Manglik, President, Retail Distribution, Religare Securities. China’s manufacturing sector fell to its lowest level in over six years triggering a sell-off in Asian equities.
The preliminary Markit China Manufacturing Purchasing Managers’ Index stood at 47.1 in August, down from July’s final reading of 47.8. China’s economy, a key driver of global growth, expanded 7.4 percent last year, its weakest since 1990, and has slowed further this year, growing 7.0 percent in each of the first two quarters.
Vedanta was the hardest hit (down 3.81%), followed by Bajaj Auto, Hero MotoCorp and GAIL. On a weekly basis, the Sensex lost 701.24 points and the NSE Nifty 218.60 points.
