Mumbai: The Indian market was closed sharply lower on Monday with Sensex down 525 points at 58,491, weighed by global sales that had its origins in the default loan by the largest real estate developer in China, where investors held bonds.
Analysts said that even the second largest real estate company in China was in trouble with increasing debt, and the shared impact of the two entities now threatened a fragile global recovery.
On Monday, trading in Dalal Street began with weak records with Sensex down almost 400 points.
It recovers and is in green during the day.
But after that, he lost the ground firmly closing almost 1% lower.
The loss of 525 points on that day was a decrease in the biggest single session in two months, BSE data showed.
At NSE, Nifty also crossed a similar track and closed 188 points lower at 17,397.
Commodity and metal stocks are the worst hit.
Slide day on BSE left investors worse by Rs 3.4 lakh crore with market capitalization now at Rs 257.7 lakh Crore, official data shows.
According to a report by investment management based in the US, Evergrande liabilities are around 6.5% of the total national property market obligations and around 9% of the total financing of the Chinese offshore bond market.
“Because the company is currently considered a bellwether for the property market and also an investor risk gauge for a broader offshore market, fair to assume that there may be systemic risks to the market if trials are left without sound,” it was said in the report published on the day Monday.
Coming in two years of sales of covid-pandemic LED panic witnessed at the beginning of 2020, investors took a careful attitude and lowered their position in the event of a debt crisis in China swallowed the global market.
As a result, in the mid-session in the US, the Dow Jones index fell more than 2%, while the Nasdaq was 2.6% lower.
Crude oil also slipped more than 2% and copper futures (December delivery) in Chicago fell by almost 3%.
Back home, Slide in Sensex is led by HDFC and HDFC Bank, along with Tata Steel.
These three shares together accounted for more than 60% of day losses in Sensex, BSE data shows.
On the other hand, buying FMCG shares, along with the dependency industry, tender down to a certain extent.
Brokers also showed that while domestic funds were aggressive sellers with a clean red outflow of 1,627 crore rs, foreign investors were still clean buyers at Rs 93 Crore.
The disadvantages in metal stocks and commodities attract the BSE metal index with almost 7%, while the basic material index closes more than 4%.
Contagion Fear Global Grips MKTS for China’s debt crisis
