Mumbai: The 30-share BSE Sensex fell 281 points - biggest fall in two months - on Monday, weighed down by Spain woes and road block to FDI in retail. Sharp fall in rupee too added fuel to the fire.
The BSE benchmark declined 1.64 per cent to close at 16,877.35 and the NSE benchmark was down 87.15 points to 5,117.95.
Global markets plummeted quite badly as investors grew more concerned that Spain may need a full sovereign bailout after a second region (Murcia after Valencia) indicated it would likely need government help.
Justin Harper, head of research, IG Markets finds that the Spanish government is downplaying its country’s debt issues.
“That fear is very much evident in the marketplace as in they have often said that they are fine and are strong enough and the next minute they have had to come to the EU or the IMF to ask for funding,” says Harper.
France's CAC, Germany's DAX and Britain's FTSE dropped 1.7-2 per cent. Athex Composite Share Price Index crashed over 6 per cent.
Asian markets too took beating. Hang Seng tanked 3 per cent while Shanghai, Nikkei, Kospi, Straits Times and Taiwan Weighted were down 1-2 per cent.
The Dow Jones futures fell over 100 points, indicating a weak opening of US markets on Monday.
Oil prices slipped towards USD 103 a barrel as investors sold off riskier assets and fled for the perceived safety of the dollar on fears that Spain will not be able to avoid a costly sovereign bailout.
Brent crude was down USD 3.20 at USD 103.63 a barrel, after brushing an intraday low of USD 102.95. Brent had posted a fourth straight weekly gain in the previous session. US crude fell USD 3.05 to USD 88.78 a barrel.
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