Sensex stumbles 11 percent, closes at 8,701

Oct 24, 2008 Stock Market

The Sensex today crashed by 1,071 points and ended the day at 8,701. Overall, it fell 11 per cent in a single day. The Nifty fell 359 points to close at 2,584.

As far as the Sensex is concerned, it has suffered such steep falls before, both in terms of percentage as well as in terms of points.

Double digit percentage crashes:

December 21, 1990 – Fall of 16.19%
April 28, 1992 – Fall of 12.77%
May 17, 2004 – Fall of 11.14%

The biggest crashes in points:

October 24, 2008 – 1,071 points
January 21, 2008 – 1,408 points
March 17, 2008 – 951 points
March 03, 2008 – 901 points

Other than the global meltdown and fate of the US Economy, one of the factors contributing to the drastic and sudden fall was attributed to the decision of the RBI to leave key interest rates unchanged.

There were no index gainers, and it was surprising to see the extent to which some stocks tumbled on the Sensex, like DLF (-23.96%), Ranbaxy (-17.83%), Hindalco (-17.82%), Tata Motors (-16.54%) and Reliance (-16.44%), and on the Nifty too, like Unitech (-49.68%), Suzlon (-39.54%), DLF (-23.67%), Nalco (-22.06%) and Ranbaxy (-18.04%).

We are now pretty much at market levels of 4-5 years ago, and it seems as if the entire bull run has been rolled back to those days. I believe it is still a good time to buy stocks at dirt cheap valuations, although selectively, keeping some thoughts in mind.