But is this the time to buy or stay safe?
MUMBAI: The Bombay Stock Exchange Sensex crashed 506 points on Monday as investors shunned stocks fearing a global banking contagion triggered by the serial collapse of big American and European banks over the past two weeks. With the fate of the proposed $700 billion US bailout package for the financial sector still hanging in balance and the flu now flying across the Atlantic to banks in Europe, risk aversion has reached an all-time high.
At one point on Monday, the Sensex had lost 700 points, plunging to its lowest intra-day level in 18 months at 12,402, as foreign institutional investors (FIIs) sold more than Rs470 crore worth of shares. It recovered later to end at 12,595, with domestic institutions providing support at lower levels. The domestic market fell for the third consecutive trading session, with the Sensex declining 1,096 points in the last three sessions.
Real estate and private bank stocks, led by ICICI Bank, were major losers. The largest private sector bank lost 12% to end at its new 52-week low of Rs493. Over 960 stocks ended at their 52-week lows, their lowest close in a year.
