Sensex Plunges to 34005 Points After Banking Stocks Nosedive

An Indian one rupee coin is seen in this

An Indian one rupee coin is seen in this

This is the weakest closing since January 4 when it had ended at 33,969.64.

U.S. stocks have plunged more than 1,000 points for the second time this week and the stock market was now in a correction - 10 per cent off its record high just two weeks ago, the media reported.

Tokyo's benchmark index plunged more than two percent on Friday after European and U.S. stocks suffered big drops as volatility continued to dog equity markets.

USA stocks began to wobble last Friday after a healthy USA labour market report sparked a spike in bond yields and fears of rising inflation which could trigger more central bank rate hikes.

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In the Asian region, Japan's Nikkei down 2.55 per cent, Hong Kong's Hang Seng fell 1.09 per cent, while Shanghai Composite Index up 0.73 per cent.

A total of 15 stocks registered a fresh 52-week high in trade today, while 12 stocks touched a new 52-week low on the NSE. In broader markets, Nifty50 index hit an intra-day high of 10,637 levels. DIIs had bought shares worth Rs 461.19 crore, while foreign funds sold shares to the tune of Rs 1,022.50 crore yesterday.

"The steep correction in stock prices over the past few weeks reflects a partial retracement of the sharp increase in stock prices and multiples over the past 12 months, which is more visible in the mid-cap stocks".

Heavy selling pressure in banking, auto, oil and gas, capital goods and IT stocks were witnessed. If earnings continue to improve, it will give stability to Indian markets and the downside from here on could be limited.

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