MUMBAI (Reuters) - The BSE Sensex and Nifty slumped nearly 6 percent on Monday, posting their biggest daily falls since January 2009 as steep falls in Chinese equities sparked widespread unrest in global markets.
The rupee also fell, hitting its weakest since early September 2013, and prompting Reserve Bank of India Governor Raghuram Rajan to say he stood ready to deploy foreign exchange reserves to curb volatility in the currency.
Still, analysts believe Indian markets could be hurt less than other countries given its sturdier economic fundamentals, including a narrow current account deficit and the government’s commitment to maintain tight discipline over its finances.
“We are facing a global market meltdown and it will have a collateral impact including the Indian market. However, the economic parameters would remain relatively stronger for India,” Deven Choksey, managing director at KR Choksey Securities said.
The BSE Sensex dropped 5.94 percent, its biggest daily percentage fall since Jan. 7, 2009. The index fell to as low as 25,624.72 at one point, its lowest intraday level since Aug. 11, 2014.
Meanwhile, the Nifty lost 5.92 percent, also its biggest fall since Jan. 7 2009. It earlier hit a low of 7,769.40, its lowest since Oct. 17, 2014.
Mid and small-cap stocks too took a beating, the BSE mid-cap index fell 7.68 percent while the small-cap index ended 8.81 percent lower.
Reporting by Karen Rebelo; Editing by Rafael Nam and Anand Basu