The Left parties' demand for scrapping the divestment policy before the formation of the government at the Centre played havoc on the bourses, wiping out a market cap of over Rs 1,00,000 crore (Rs 1,000 billion) and the BSE Sensex tumbled by a huge 330 points to end at 25-week low at 5069.87 on across-the-board sell-off by investors.
The market also witnessed the biggest intra-day fall in four years as the foreign institutional investors battered the PSU and banking stocks in a knee-jerk reaction after the Communist Party of India-Marxist and Communist Party of India made it clear that the divestment policies should be scrapped.
The market's intra-day swing of 372.05 points is the fifth largest in the Bombay Stock Exchange history. The previous record was on May 2, 2000 when the market gyrated in the range of 393.17 points.
The BSE Benchmark 30-share Index opened on a promising note at 5409.34 and moved up to the day's high of 5416.04. However, the heavy sell-off sent the Sensex hurtling down to end at 5069.87 as against yesterday's close of 5399.47, a net fall of 6.10 per cent or 329.60 points, the fourth largest fall in the history.
PSU and banking stocks were the worst hit as FIIs pressed aggressive sales in the sectors following the Left parties' anti-privatisation stand for participating in the new government at the Centre.
The Lok Sabha elections beginning from the day one, when the first phase was held on April 20, have continued to take its toll on investors' wealth. Today's mayhem in bourses led to another sharp erosion in the overall market capitalisation to the extent of Rs 1,02,108 crore (Rs 1,021.08 billion).
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