Top 5 factors why Sensex slumped over 500 points

NEW DELHI: The S&P BSE Sensex plunged over 500 points in morning trade on Thursday after China halted trading for the second time in a row and the People’s Bank of China (PBoC) lowered the yuan peg to the dollar by 0.51% to 6.5646. The Nifty 50 broke below its crucial support of 7,650 weighed down by losses in realty, power, oil & gas, metals, and banking stocks. Here is a list of factors that weighed on the markets:

China Further Devalues Yuan

Yuan softened to its softest level against the dollar since February 2011. PBoC set the midpoint rate at 6.5646 to the dollar prior to market opening. China’s economic slowdown might not impact India directly but considering it is the world’s second-largest economy, the resultant global sluggishness will impact Indian economy.

Crude Hits 11-year Low

The world’s supply glut showed no signs of easing and slowing demand added to the gloom. Apart from that, fresh concerns over China’s economy added to huge storage overhangs. Brent crude dropped to $34.95 a barrel, its lowest since 2004.

Weak Handover from Wall Street

US markets plunged more than 1% to a three-month low as fresh concerns over the impact of a slowdown in China amid fall in oil prices made investors to adopt a risk off mode.

Sovereign Downgrades

Downgrades are likely to outpace upgrades in 2016, says Standard & Poor’s Ratings Services in its report

World Bank Lowers Growth Forecast

The World Bank slashed its growth forecast for the global economy in 2016 on Wednesday, citing “disappointing” growth in major EMs like China.