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Brexit Impact: Sensex Tumbles Over 1,000 Points, Rupee Past 68/Dollar

The BSE Sensex slumped over 1,050 points or nearly 4 per cent, while the broader Nifty index traded below the psychological 8,000 levels as Brexit fears came true. The rupee plunged over 1.4 per cent to 68.21 per dollar mark.
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The Sensex and rupee saw huge selloff as Brexit fears came true
The Sensex and rupee saw huge selloff as Brexit fears came true

Highlights

  1. The rupee posted its biggest intraday fall since August 2015
  2. Tata Motors crashes 14%, Tata Steel slumps 8%
  3. The UK pound suffered one of its biggest-ever fall
It's a Black Friday for global financial markets as voters in Britain voted in favour of quitting the European Union. In India, the BSE Sensex slumped over 1,050 points or nearly 4 per cent, while the broader Nifty index traded below the psychological 8,000 levels as Brexit fears came true. The rupee plunged over 1.4 per cent to 68.21 per dollar mark.

Here are the latest developments:

1) The Sensex suffered its biggest intraday fall in 10 months. It traded below the psychological 26,000 mark, while the Nifty plunged 330 points lower. All 51 stocks in Nifty index traded lower.

2) 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.

3) 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.

4) 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.

5) 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.

6) The selloff in Indian markets was on account of global volatility. The pound plummeted from about $1.50 to below $1.35 in one of its biggest-ever fall. The pound was trading at its lowest since 1985.

7) The FTSE100 futures traded nearly 9 per cent lower, suggesting a collapse in UK stock markets.

8) 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.

9) 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.

10) According to futures trading, Wall Street is likely to suffer huge losses. The S&P500 futures in the US traded over 3 per cent lower, indicating sharp selloff in US markets.

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