The 10 biggest falls in Sensex history

It was a Terrible Tuesday for the bourses. The Sensex saw its biggest intra-day fall when it hit a low of 15,332, down
2,273 points. However, it recovered losses to some extent and closed at a loss of 875 points at 16,730.

Trading was suspended for one hour at the Bombay Stock Exchange after the benchmark Sensex crashed to a low of
15,576.30 within minutes of opening, crossing the circuit limit of 10 per cent.

At the time of suspension, the Sensex was quoted at 15,576.30 points, plunging 2029 points (11.53 per cent) from
Monday's close.

Investors on Tuesday lost over Rs 6 lakh crore (Rs 6 trillion) within minutes of opening of the Bombay Stock
Exchange, which was immediately suspended for an hour after the 30-share barometer index, Sensex, hit the circuit
limit of 10 per cent.

This loss of Rs 6,54,887.85 crore (Rs 6.548 trillion) comes on top of over Rs 11 trillion loss suffered by investors on
the Dalal Street [Get Quote] in the last six days.

The Sensex and Nifty saw its second biggest intra-day loss on Monday. Relentless selling saw the index crash to a
low of 16,951 - down 2,063 points (10.8%) from the previous close.

The index shed 1408.35 points (7.1%) to close at 17,605.40, the biggest-ever loss in absolute terms and also the
first-ever four digit loss for the index at close. The Nifty lost 496.50 points (8.70%) to close at 5,208.80 points.

The Sensex saw its third biggest intra-day loss on October 17, 2007, when it plunged by 1,743 points. The Sensex hit
a low of 17,307.90 points within minutes of opening, following which trading was suspended in the market for an hour.

The markets had crashed on the wake of Securities and Exchange Board of India's (Sebi) proposal to tighten the
rules for purchase of shares and bonds in Indian companies through the participatory note (PN) route.

Here are the 10 biggest falls in the Indian stock market history:

Jan 21, 2008: The Sensex saw its highest ever loss of 1,408 points at the end of the session on Monday. The
Sensex recovered to close at 17,605.40 after it tumbled to the day's low of 16,963.96, on high volatility as investors
panicked following weak global cues amid fears of the US recession.

Jan 22, 2008: The Sensex saw its biggest intra-day fall on Tuesday when it hit a low of 15,332, down 2,273 points.
However, it recovered losses and closed at a loss of 875 points at 16,730. The Nifty closed at 4,899 at a loss of 310
points. Trading was suspended for one hour at the Bombay Stock Exchange after the benchmark Sensex crashed to
a low of 15,576.30 within minutes of opening, crossing the circuit limit of 10 per cent.

May 18, 2006: The Sensex registered a fall of 826 points (6.76 per cent) to close at 11,391, following heavy selling by
FIIs, retail investors and a weakness in global markets. The Nifty crashed by 496.50 points (8.70%) points to close at
5,208.80 points.

December 17, 2007: A heavy bout of selling in the late noon deals saw the index plunge to a low of 19,177 - down
856 points from the day's open. The Sensex finally ended with a huge loss of 769 points (3.8%) at 19,261. The NSE
Nifty ended at 5,777, down 271 points.

October 18, 2007: Profit-taking in noon trades saw the index pare gains and slip into negative zone. The intensity of
selling increased towards the closing bell, and the index tumbled all the way to a low of 17,771 - down 1,428 points
from the day's high. The Sensex finally ended with a hefty loss of 717 points (3.8%) at 17,998. The Nifty lost 208
points to close at 5,351.

January 18, 2008: Unabated selling in the last one hour of trade saw the index tumble to a low of 18,930 - down 786
points from the day's high. The Sensex finally ended with a hefty loss of 687 points (3.5%) at 19,014. The index thus
shed 8.7% (1,813 points) during the week. The NSE Nifty plunged 3.5% (208 points) to 5,705.
November 21, 2007: Mirroring weakness in other Asian markets, the Sensex saw relentless selling. The index
tumbled to a low of 18,515 - down 766 points from the previous close. The Sensex finally ended with a loss of 678
points at 18,603. The Nifty lost 220 points to close at 5,561.

August 16, 2007: The Sensex, after languishing over 500 points lower for most of the trading sesion, slipped again
towards the close to a low of 14,345. The index finally ended with a hefty loss of 643 points at 14,358.

April 02, 2007: The Sensex opened with a huge negative gap of 260 points at 12,812 following the Reserve Bank of
India [Get Quote] decision to hike the cash reserve ratio and repo rate. Unabated selling, mainly in auto and banking
stocks, saw the index drift to lower levels as the day progressed. The index tumbled to a low of 12,426 before finally
settling with a hefty loss of 617 points (4.7%) at 12,455.

August 01, 2007: The Sensex opened with a negative gap of 207 points at 15,344 amid weak trends in the global
market and slipped deeper into the red. Unabated selling across-the-board saw the index tumble to a low of 14,911.
The Sensex finally ended with a hefty loss of 615 points at 14,936. The NSE Nifty ended at 4,346, down 183 points.
This is the third biggest loss in absolute terms for the index.

Biggest-ever loss: Sensex plunges 1,400 points

F ollowing the hefty 1,814-point loss last week, the Sensex opened with a negative gap of 94 points at 19,014, and
continued to drift deeper into red as the day progressed.

Relentless selling in the last session saw the index tumble to a low of 16,951 - down 2,063 points (10.8%) from the
previous close. (Since the index had dropped over 10% after 1400 hrs, the circuit limit was placed at 15%).

Bargain hunting at lower levels saw the index recover some ground, and finally end at 17,605 - down 1,408 points
(7.4%); the biggest-ever loss in absolute terms and also the first-ever four digit loss for the index.

While the Midcap Index plunged 1,012 points (11.4%) to 7,882, the Smallcap Index tumbled 1,249 points (10.3%) to
9,443.

The NSE Nifty shed 496 points (8.7%) at 5,209.

The BSE breadth was extremely negative - out of 2,810 stocks traded, 2,657 declined, 139 advanced and 14 were
unchanged.

Index Shakers

Reliance Energy [Get Quote] and ACC crashed around 16% each to 1,776 and Rs 728, respectively.

Bajaj Auto [Get Quote] tumbled over 15% to Rs 2,064. NTPC slumped over 14% to Rs 206, and Reliance
Communications [Get Quote] plunged nearly 13% to Rs 613.

Hindalco [Get Quote] and DLF dropped over 10% each to Rs 166 and Rs 904, respectively.

Grasim [Get Quote] and Reliance slipped over 9% each to Rs 3,025 and Rs 2,544, respectively.

Tata Motors [Get Quote], BHEL and ONGC [Get Quote] declined around 8% each to Rs 654, Rs 2,114 and Rs 1,114,
respectively.

Mahindra & Mahindra, Tata Steel [Get Quote] and TCS [Get Quote] shed 7.5% each at Rs 673, Rs 722 and Rs 836,
respectively.
SBI [Get Quote] and Hindustan Unilever dropped around 7% each to Rs 2,200 and Rs 200, respectively.

Larsen & Toubro, Ranbaxy [Get Quote] and Cipla were down 6% each at Rs 3,689, Rs 363 and Rs 190, respectively.

ICICI Bank [Get Quote] and HDFC [Get Quote] declined nearly 6% each to Rs 1,173 and Rs 2,660, respectively.

Bharti Airtel [Get Quote], Infosys [Get Quote], ITC, Maruti [Get Quote], HDFC Bank, Ambuja Cements and Wipro [Get
Quote] were down 3-5% each.

Value & Volume Toppers

Reliance topped the value chart with a turnover of Rs 663.60 crore followed by Reliance Natural Resources [Get
Quote] (Rs 491.70 crore), Reliance Energy (Rs 466.40 crore), Reliance Petroleum [Get Quote] (Rs 456.80 crore) and
Reliance Capital [Get Quote] (Rs 340.50 crore).

Reliance Natural Resources led the volume chart with trades of around 2.75 crore shares followed by Ispat Industries
[Get Quote] (2.55 crore), Reliance Petroleum (2.47 crore), Tata Teleservices [Get Quote] (1.53 crore) and IFCI (1.49
crore

Why did the stock market crash?

January 21, 2008

Black Monday saw bloodbath on Dalal Street as the Indian stock markets crashed by over 1430 points in
afternoon trade (the market has since then recovered somewhat), reminding investors that there is no one-way bet on
the stock market.

Why did this huge fall happen?

Many factors. One, there is a change in the global investment climate. One of the primary triggers is the huge fear of
the United States' economy going into a recession with foreign institutional investors trying to reallocate their funds
from risky emerging markets to stable developed markets. Analysts are now expecting a cut in US interest rates.

Hedge funds and FIIs could have been the biggest sellers in the Indian markets, booking profits and making the most
of the unprecedented bull run that has dominated the Indian stock market for a long time now.

The current volatility is also linked to global bourses. There is a big correlation among global markets. The presence
of hedge funds across asset classes, along with increased global movement of capital, has increased event-related
volatility.

Volatility in commodities markets has also significantly affected equity markets.

A combination of global and local factors is affecting this market, said Mihir Vora of HSBC Mutual Fund, on NDTV
Profit. On the global front, other emerging markets were down nearly 20% so India is playing catch-up, he said.

On the local front there has been a huge build-up in derivatives positions and volatility led to margin calls. Also many
IPOs have sucked out liquidity from the primary market into the secondary market, said Vora. At current levels it
would be a buy call and we would not advise investors to wait to catch the bottom, he added.

How long will the markets keep falling?

Analysts expect the markets to continue to be choppy for a while till global liquidity and commodity prices settle in.
With the markets falling, a technical correction in the derivatives segment has perpetrated a larger fall.

The Sensex can fall another 10-15%, said Adrian Mowat of JP Morgan, on NDTV Profit.

India is trading at 65% premium to emerging markets and India is playing catchup with other declining global markets,
he added. There is no need to get very pessimistic that this is the end of equity investing in India, he said. This could
be seen as a buying opportunity and we will re-visit market valuations after the correction, he added.

India cannot escape a global meltdown. With fears of an impending US recession high, no country is likely to be
spared.

Why did the stock market crash?

January 21, 2008

Was it inevitable?
When the global economy has been cooling down, and the financial sector in particular has been heading from one
cold shower to the next, it was inevitable that stock markets around the world would start catching the chill.

The way in which Asian stock prices responded last week to the fall of the Dow Jones and Nasdaq indices by 4 per
cent, hitting a 10-month low, has also punctured a hole in the decoupling argument (which said Asia would not be hit
by an America-based problem) that had become fashionable in recent weeks.

Investors around the world have taken note of the fact that the broad-based S&P 500 index is at a 16-month low,
along with European stocks. And investors seem to have little faith in the Bush rescue plan's ability to ward off a
recession in the US. The Fed will almost certainly respond with sharp cuts in interest rates towards the end of the
month, but the market has already discounted for that.

Indian markets worst hit

It is interesting that Indian markets were hit the most, among all Asian markets. This may have been because the
correction in the overheated Chinese stock market began some weeks ago. Investors will also have noticed that the
third-quarter corporate numbers show significant deceleration in both sales and profit growth, when compared to the
same quarter a year earlier.

When coupled with the data showing that the export target for the year will be missed by a wide margin, and that the
industrial sector has suffered a sharp slowdown, it was inevitable that stock prices would have to come off their dizzy
highs.

What began with profit-booking and unwinding of long positions cascaded on Friday into a 3.5 per cent decline in the
Sensex. Foreign institutional investors had moved to the sidelines in the secondary markets even earlier, and FIIs
have been net sellers to the tune of Rs 2,200 crore (Rs 22 billion) in January. Also relevant was the Reliance Power
IPO, which pulled in a record amount of application money (Rs 1,15,000 crore (Rs 1,150 billion)). Even if a third or a
fourth of that was being garnered by sale of stocks, it is a large enough sum for the market to go into correction
mode.
There is no doubt that valuations had become expensive. Even after the 10 per cent correction from the market's
peak, the Sensex trades at a trailing P/E multiple of 24.5, which is not cheap in anyone's book.

Yet, buying may soon begin

A global liquidity surplus had certainly contributed to momentum buying. The question is whether the correction that
has occurred so far is enough for fresh buying to emerge, or whether a further fall is required before value-based
buying starts.

On a forward basis, the Sensex trades at an FY09 estimated P/E of 18. The floor therefore would probably be a
Sensex level of 17,000-odd -- which would mean wiping out the gains of the past three months, no more. Provided
the general economic and corporate news does not get worse than has already been anticipated, fresh buying cannot
be very far away

Is everything okay with the economy?

The fundamentals of the Indian economy are still very strong. Some analysts say that business environment is good,
but corporate earnings are not as good as they wree last year.

Will foreign investors sell more stocks?

Market expectations are that foreign investors would continue to sell.

With FIIs turning sellers on the domestic bourses, it is likely that domestic mutual funds might step in and buy equity
thereby preventing a further fall. However, it remains to be seen if this would happen.

What should traders do now?

"If you have the money it's a great time to buy into this market," said Ambareesh Baliga of Karvy Stock Broking on
NDTV Profit. There is no fundamental reason for this massive fall in the market and its been all about margin calls, he
added.

Given the rise in volatility, it may not be advisable to trade in stocks that lack liquidity. Trading in stocks, which do not
find presence in the derivatives segment may be dangerous.

The reason is simple: derivatives give you an option to hedge your position, limiting your losses, in case the market
goes against you.

Keep your trading positions about 30 per cent lower than what you can actually afford. This would greatly help in
avoiding distress sale in case the regulators slap additional margins. For an investor, leveraged positions are
completely avoidable.

Trading halted: BSE asked to clarify

January 21, 2008 19:17 IST
The Securities and Exchange Board of India (Sebi) has asked for an explanation from the Bombay Stock Exchange
(BSE) for the shutdown in trading just after 2.30 p.m. as the rules allow the circuit filter (or the maximum allowed
swing) of 15 per cent before stopping trading for one hour.
In a dramatic day's developments, the BSE stopped trading for a brief period after 2.30 p.m. after the Sensex dived
over 2,000 points amid speculations that the exchange closed trading after the circuit ceiling (the maximum allowed
swing) was triggered.

"Sebi has asked for explanation from BSE," a Sebi official said.

The exchange spokesman explained: "It was only a technical snag. It was not a circuit filter. It was just a coincidence
(that the shutdown occurred when the Sensex fell over 10%)."

As per rules, the circuit gets triggered only if the benchmarks fall (or rise) 15 per cent after 2.30 p.m. or one-hour
before the close. Before 2.30 p.m., the trigger is 10 per cent.

There was no such stoppage by the National Stock Exchange though its officials also asked brokerage houses to pay
up the margin money so that they could continue trading unobstructed.

When is trading halted

Trading will be halted if index drops 15 per cent.

According to data on the BSE website, "In case of a 10 per cent movement of either index, there would be a 1-hour
market halt if the movement takes place before 1:00 p.m.

In case the movement takes place at or after 1 p.m. but before 2:30 p.m. there will be a trading halt for half an hour.
In case the movement takes place at or after 2:30 p.m. there will be no trading halt at the 10 per cent level and the
market will continue trading.

"In case of a 15 per cent movement of either index, there will be a 2-hour market halt if the movement takes place
before 1:00 p.m. If the 15 per cent trigger is reached on or after 1:00 p.m. but before 2 p.m., there will be 1-hour halt.
If the 15 per cent trigger is reached on or after 2:00 p.m. the trading will halt for the remainder of the day.

"In case of a 20 per cent movement of the either index, the trading will

Market crash: Have you been hit?

Trading was suspended for one hour at the Bombay Stock Exchange after the benchmark Sensex fell to the low of
15,576.30 within minutes of opening, crossing the circuit limit of 10 per cent.

On Monday, the Sensex crashed by 1408 points (7.1%) to close at 17,605 points, the biggest-ever loss in absolute
terms and also the first-ever four digit loss for the index.

Concerns of a recession in the US have hit markets around the world, with stock markets in Japan, South Korea and
Australia also suffering setbacks.

What do you think of the market crash? Is this the beginning of the end for investors in India? Or will the markets
bounce back?

Investors lose over $300 bn in 6 days

Investors on Dalal Street [Get Quote] have lost over $300 billion (Rs 11,85,285 crore or Rs 11,852.85 billion) in the last
six days with more than half of the loss coming from today's fall of the benchmark index Sensex--its biggest ever.

The 30-share index Sensex Monday witnessed a fall of 1,400 points, tumbling below the 18,000-point to close at
17,605.35.
The huge drop in the index was led by blue chip heavyweights -- Reliance Energy [Get Quote], ACC, Bajaj Auto [Get
Quote], DLF and Reliance Industries [Get Quote].

The Sensex has lost 3,222.1 points in last six trading sessions, while investors' wealth -- measured in terms of
cumulative market capitalisation of all the listed companies -- has declined by Rs 11,85,285.46 crore (Rs 11,852.85
billion).

The total market capitalisation stood at Rs 59,53,525.87 crore (Rs 59535.25 billion) at the end of today's trading
against Rs 71,38,810 crore (Rs 71,388.1 billion) before bourses began business last week on January 14.

While the investors have lost a whopping Rs 6,63,975 crore (Rs 6,639.75 billion) in just one trading session from
market cap of Rs 66,17,501.33 crore (Rs 66,175.01 billion) on Friday last week. The investors had lost over 5,21,310
crore (Rs 5,213.1 billion) in the five trading sessions last week.

According to market analysts, the major fall has been mainly due to the slowdown concerns in the US economy
among other factors

The Indian Sensex Fall and its Impact - Bombay Stock

Exchange BSE
India is the second fastest growing economy as per economists and statisticians the world
over. The Bombay stock exchange or BSE, as it is called is the indicator of the economic
strength or weakness of the country. India, which had a closed-door market policy till the
late eighties, was a very slow growing economy till then. After India opened its doors to the
world in the nineties, the economy picked up at a very rapid rate. Foreign investment grew
and the Bombay stock exchange, the prime indicator of the nation’s wealth saw a
tremendous increase in points. The sensex, which is a weighted average, based on market
capitalization of thirty leading scrips, as against the base average figures of 1979; saw a
boom in this period. Apart from a few crashes here and there, caused by fluctuations in the
international market and also by some fraudulent scams by the local share brokers, the
Indian sensex has been on an upswing since then.
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The sensex climbed at a rapid rate, touching record heights in 2007 -2008. The average
Indian investor who traditionally has been a very conservative investor became more
confident and started investing heavily in the stock market. The stock market grew in leaps
and bounds and its growth in the last five years itself has been a phenomenal twenty five
per cent. All the economists and statisticians of the world started making predictions about
India becoming the next economic superpower of Asia or perhaps the world. All this
sounded very good to be true and the whole country’s attitude seemed to be a vibrant one.
Against this backdrop the unthinkable happened, the stock market Of the United states of
America or Wall street stock exchange crashed due to a crisis in the housing finance sector
of its leading banks, caused due to delinquency and non-repayment of housing loans. This
resulted in a panic in the world market including India. The sensex dropped more than nine
thousand points in the Bombay Stock Exchange. The Foreign Investment also came down
heavily due to a liquidity crunch in the major companies. The banks stopped lending to the
bankers and in effect the market came to a sudden stop. The Indian investor panicked again
and started selling like crazy. Major companies started making announcements like job
layoffs to minimize their losses.
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This holds true for the aviation industry, among which jet airways the leading player in the
private sector, suddenly announced job lay offs in the thousands but later withdrew the
layoffs to save face and retain goodwill. However the finance ministry and leading
economists have assured the investors that there is no need to panic and run and have
promised state support to withstand the crisis. The economists have also been optimistic
about the issue saying, a major chunk of Indian money is still is in safe investments rather
than high risk ones. At the point of writing this, Indian markets seem to be stabilizing slowly
and we will have to wait and watch what transpires over the next few days. The general
mood in the air seems to be one of optimism