A day after Prime Minister Narendra Modi announced existing Rs 500 and Rs 1000 notes invalid in an attempt to curb black money dealings, the Sensex crashed 1,600 points while Nifty plunged 476 points today. Investors in India lost Rs 7 lakh crore, as per market estimates. The black money crackdown and Republican Party's Donald Trump's strong showing in the US presidential election have hit the market hard.
The sharp nosedive of the stock market was expected over the government's surprise move to stop circulation of existing Rs 500 and Rs 1,000 notes from Tuesday midnight.
MEANWHILE, DOLLAR PLUNGES
The US dollar sank and stock markets slammed into reverse in wild trade on Wednesday as investors faced the real possibility of a shock win by Republican Donald Trump that could upend the global political order.
Every new exit poll in the US presidential election showed the race to be a nail-biter, sending investors stampeding to safe-haven assets.
Sovereign bonds and gold shot higher while the Mexican peso went into near free-fall as ABC News gave the key battleground state of Ohio to Trump. As of 0325 GMT, Trump was leading Democratic rival Hillary Clinton by 45 Electoral College votes, with a tally of 167-122. It takes 270 to win. FULL COVERAGE
ALSO READ: US Presidential Election Results: Donald Trump has slight edge on Clinton in several battleground states
MARKETS ON EDGE
Markets fear a Trump victory could cause international economic and trade turmoil, discouraging the Federal Reserve from raising interest rates in December as long expected. Fed fund futures were even starting to toy with the idea of a cut in rates next year.
The scale of the scare was clear in the Mexican peso, where the dollar surged over 10 percent in the biggest daily move in two decades. The peso has become a touchstone for sentiment on the election as Trump's trade policies are seen as damaging to its export-heavy economy.
But the story was very different against the safe-haven yen, with the dollar shedding 3 per cent to 102.02 yen. The euro gained 1.5 percent to $1.1190. South Korean authorities were thought to have intervened to steady their currency, and dealers were wondering if central banks globally would step in to calm nerves.
ASIA HIT TOO
US stock futures recoiled more than 4 per cent, a loss reminiscent of the carnage that followed the British vote to leave the European Union in June. Asian stocks followed, with MSCI's broadest index of Asia-Pacific stocks outside Japan down more than 3 percent, while the Nikkei sank nearly 5 percent. "Rightly or wrongly, markets are going to be concerned about a Trump victory, particularly given the potential consequences for world trade and its impact on many large companies in the U.S. stock market," said Ric Spooner, chief analyst at CMC Markets in Sydney.
"Like Brexit, the rally over the last two days increases the downside potential if Donald Trump does win the election," he added, referring to Britain's unexpected vote to leave the European Union that shook world markets. Oil prices skidded, with benchmark U.S. crude futures lost down $1.05 to $43.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 9 cents to close at $44.98 a barrel on Thursday. Brent crude, used to price international oils, slid $1.11 to $44.93 a barrel in London.