Sensex drops to over three-week low after China marketplace rout
India’s stock markets dropped 2 percent to their lowest level in over three weeks on Thursday after the depreciation of the yuan hastened, triggering sudden drops in money markets and regional equity.
Its stock markets were also frozen by China for the remaining part of the day less than 30 minutes after opening as a fresh circuit-breaking mechanism was tripped for the 2nd time.
However, analysts believed Indian shares would finally resist the volatility activated by China, given the more sturdy economic principles.
“I believe the marketplace is overreacting. The principles of the marketplace as well as the economy are much better than what one could expect for,” said Deven Choksey, managing director at KR Choksey Securities.
This week both indexes have lost about 5 percent each.
Midcap stocks dropped the most with the BSE midcap sub index falling as much as 2.64 percent.
Among other stocks that fell, Tata Motors (TAMO.NS) dropped 5.9 percent on stresses a slow down in China would reach Jaguar deal.
Apollo Tyre (APLO.NS) fell 3.6 percent, CEAT (CEAT.NS) dropped 4.4 percent and JK Tyre (JKIN.NS) decreased about 6 percent as panics a more affordable yuan would make Chinese tyre exports more appealing strike Indian tyre stocks.
Bloomberg TV earlier in the day reported the government was mulling selling section of its own position in Axis Bank, the country ‘s third-largest private sector lender.