The panic selling in global equities resumed after a brief reprieve last week – the S&P 500 index shed another 3.75 per cent overnight (February 8), bringing its total losses to 8.5 per cent since the correction started. While investors’ concern on rising rates was a commonly-cited reason for the correction, the unwinding of exchange-traded products (ETPs) that bet on volatility is another plausible factor accentuating the situation.
The markets saw extreme volatility and lost on four of the five trading sessions on the back of global cues and the after-effects of LTCG. The Dow Jones and bond yields shook global markets and literally rattled them. The Dow Jones lost 1,330.06 points, or 5.50 per cent, to close at 24,190.90 points.
The BSE Sensex tanked 440 points to end at over three-month low of 31,159.81 due to across the board selling by investors ahead of the expiry of September derivatives and weakness in the rupee amid mixed global cues.
Benchmark Sensex today slipped from life highs to end sharply lower at 31,710.99 by falling 364 points following a steep plunge in ITC Ltd stocks after the GST Council yesterday hiked tax on cigarettes.
The Sensex and the Nifty today made the most of the momentum and registered new all-time peaks at 32,074 and 9,916, respectively, building on optimism about corporate earnings.