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UK’s Royal exit from EU makes a ripple effect in Indian stock exchange and Forex market.
It’s a real Black Friday for global financial markets as UK leaves the European Union.Tsunami in Indian stock market, the BSE Sensex nosedived over 1,050 points or nearly 4 per cent, while the broader Nifty index traded below the psychological 8,000 levels as nightmare of Brexit fears came true. In forex market the rupee plunged over 1.4 per cent to 68.21 per dollar mark.
#Brexit: Tata motors, Bharat forge among stocks taking a severe knock on Black Friday #EUref https://t.co/K7Gz68yoj8 pic.twitter.com/iXm1MyqIoQ
— Business Today (@BT_India) June 24, 2016
Here are the latest developments:
- The Sensex suffered its biggest intraday fall in 10 months.
- Sensex traded below the psychological 26,000 mark, while the Nifty plunged 330 points lower. All 51 stocks in Nifty index traded lower.
- The rupee, which posted its biggest intraday fall since August 2015, traded off the day’s low amid reports that the Reserve Bank has sold dollars to rein in volatility. Despite RBI’s support, some analysts expect the rupee to inch near its record low of 68.85 per dollar today.
Indian economy well prepared to deal with consequences: Jaitley on Brexithttps://t.co/Y9Z2edD4rj
— The Indian Express (@IndianExpress) June 24, 2016
Indian economy has good fundamentals, low short-term external debt and sizeable foreign reserves: RBI Governor.
— Press Trust of India (@PTI_News) June 24, 2016
- The selloff in domestic stock markets was led by companies that have substantial exposure to the UK. Tata Motors, which gets a majority of profit from its Jaguar Land Rover unit, crashed 14 per cent, while Tata Steel slumped over 8 per cent. IT stocks, which get a substantial portion of their revenue in pound, also fell sharply.
- Meanwhile, traders moved from risk assets to safe haven, leading to a rally in gold prices. Gold for August delivery on the Multi Commodity Exchange traded at Rs 31,708 per 10 grams, its highest in nearly three years.
- Economic Affairs Secretary Shaktikanta Das said the government is prepared for all eventualities. Stock markets are down on initial spontaneous reaction, while the rupee depreciation is in line with other Asian currencies, he added.
- If UK quits the 28-nation European Union, its $2.9 trillion economy is likely to slip into recession. More importantly, London’s pre-eminence as global financial hub will come under threat. It is this fear that has sent massive shock waves across financial markets.
- In Asia, the Nikkei index in Japan was trading 1,000 points or 7 per cent, while the benchmark index in Hong Kong also slumped over 1,000 points or 5 per cent.
Shaktikanta Das:Enough power to deal with potential #Brexit, fundamentals of Indian economy remain strong, we are in constant touch with RBI
— Doordarshan News (@DDNewsLive) June 24, 2016
