On frenetic selling in early trade, market benchmark Sensex nosedived by over 1000 points to crack the crucial 27,000-mark, while Nifty broke below the 8,000-level after local media declared that Britain has voted to leave the European Union.
Indian Rupee opened 27 paise lower against the US Dollar. It was trading below 68 to a dollar.
Reserve Bank of India (RBI) is expected to sell dollars and bring some stability to the rupee fall. Media reports suggest that the RBI and finance ministry are meeting in New Delhi to assess the situation.
Speaking to media, Economic Affairs Secretary Shaktikanta Das said, "Government prepared for all eventualities; stock market down on initial spontaneous reaction."
He further added, "Rupee depreciation in line with other Asian currencies. Government, RBI have discussed all possible eventualities to deal with the situation."
Stating that India's trade is not going to be impacted significantly, he added, "Firepower will be used judiciously."
Consequently, the Sensex plunged by 948.54 points or 3.51 per cent to 26,053.68 with all the sectoral indices led by auto, banking and metal, slumping by up to 4.17 per cent. On similar lines, the National Stock Exchange index Nifty dropped by 294.15 points or 3.55 per cent to 7,976.30.
Sentiment suffered a jolt following a meltdown in global equities after referendum result indicated Britain would leave the European Union, triggered all-round selling, dragging down the key indices from their key levels. Moreover, the rupee breaching the 68-level against the US dollar by crashing 96 paise to 68.21 also had a bearing on the sentiment.
Most of the 30-Sensex constituents led by Tata Motors, Tata Steel, ICICI Bank, Axis Bank, SBI, Adani Ports, L&t, ONGC, Hero MotoCorp, M&M, TCS, HDFC Bank, HDFC Ltd, Maruti Suzuki, Coal India and RIL were trading in negative terrain, falling by up to 9.71 per cent.
Asian currency, bond and equity traders kicked off an early day of choppy trading as a British vote to leave the European Union sent shivers across trading floors, having kept many investors glued to their television screens.
Trading desks at most foreign banks from Hong Kong to Singapore opened on Friday nearly two hours before their normal start to take in early orders and address investor concerns, but the market meltdown and volatility ahead of the result pushed many traders to the sidelines.
Britain's bitterly contested referendum on whether to quit the EU began too close to call early on Friday, but the pound was hammered as the numbers slowly tipped in favour of a vote to leave.
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