Brexit: Sensex tanks over 1,000 points; rupee down 86 paise

Domestic equity share markets witnessed a severe pounding at the start of Friday’s trading session, as bears went amok after results from Thursday’s landmark referendum showed that UK has voted to leave the European Union.

The development has sent shockwaves across the stock and currency markets in the Asian region, including India with the benchmark Sensex crashing over 1,000 points to slip below the 26,000-mark to touch a low of 25,989.41, down 1,012.81 points.

In the currency market, the rupee crashed 86 paise to trade at 68.11 against the dollar.

In fact, the British pound that had rallied to nearly $1.5 in early trades, fell sharply to $1.35 – the lowest level since 1985.

At 10.45 am, the 30-share BSE S&P Sensex was at 26,076.41, down 925.81 points, or 3.4 percent, while CNX Nifty also slipped below the crucial 8,000-mark to trade at 7,969.50, down 300.95 points, or 3.6 percent.

Other key indices in the Asian region, too, went into a crash mode. Japan’s Nikkei was the worst hit, retreating 7.7 percent to 1,4,991.97, while China’s Hang Seng shed 4.7 percent to 19,894.12, Straits Times faltered 2.6 percent to 2,721.84 and Shanghai Composite was down 1.2 percent at 2,857.58.

Market breadth was extremely weak, as 1,861 stocks declined against 147 advances on BSE.

Shares of Tata-group companies, which has major exposure to the UK markets, were at the receiving end, tumbling 4-12 percent each.

Shares of Tata Motors tanked 12 percent to Rs 430.35, Tata Steel plunged 9.2 percent to Rs 221.50 and TCS fell 4.4 percent to Rs 2,529.05.

Frontline banking shares, too, witnessed frenzied selling, with ICICI Bank dropping 7.7 percent to Rs 222.25, Axis Bank shedding 6.2 percent to Rs 493.65 and SBI dipping 5.9 percent to Rs 204.60.

“Indian markets’ direction will be uncertain in the mixed results coming out from the EU referendum poll in the UK with neither sides seeming to have a convincing lead,” Angel Broking said.

However, select market analysts played down the development and expect the markets would soon rebound as the problem is more of a country-specific thing.

“If the Brexit happens, it could only impact the Indian businesses operating in the UK. It wouldn’t have any major impact on the Indian economy or stock markets. Basically it is their problem, not India’s problem,” said G Chokkalingam, Founder & Managing Director, Equinomics Research & Advisory.