Sensex crashes more than 1600 points for biggest single day fall

 The Nifty managed to hold 7800 level after hitting day's low of 7769.40 and the  index fell 490.95 points or 5.92 percent to 7809.

The market breadth was pathetic as about 2477 shares declined against 318 shares advanced on the Bombay Stock Exchange.

The carnage  wiped out more than Rs 7 lakh crore market capitalisation. Banks, metals, oil and capital goods stocks crumbled  as  Vedanta, GAIL, Tata Steel, ONGC, Reliance Industries and Cairn India were the biggest losers, down 9-15 percent. However, only NMDC closed in green on Nifty 50.

The rupee weakened from 64 per dollar to 66.71, a fall of over 4 per cent since August 11 when China announced the devaluation of its yuan currency.

Seeking to placate the jittery nerves, Finance Minister Arun Jaitley China's devaluation is creating ripples and has had a "transient impact" on India.

"Factors responsible for the market fall are entirely external, there is not a single domestic factor involved," Jaitley said adding  India's inflation and fiscal deficit are under control.

He said markets will settle down and that the government and RBI are watching the situation closely.

Reserve Bank of India Governor Raghuram Rajan too wanted to arrest the panic that cropped up following the sudden colossal fall as he said  India is better off than other emerging market countries in terms of macroeconomic fundamentals and that  low inflation will give investors trust in markets.

The trigger for Monday's carnage was the rout in Chinese equities. Shanghai shares closed 8.75 per cent lower marking their biggest single-day percentage loss since 2007.

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