Indian equities were down over 3 per cent on Monday, as concerns of a US recession, tensions in West Asia and unwinding of the carry trade in Japan spooked investors.

The Sensex was at 78451, down over 2500 points from the previous close. Nifty 50 was down 761 points to 23,956.

SBI, Tata Steel, Hindalco, Adani Ports, Tata Motors and ONGC were the top Nifty losers, down more than 5 per cent each.

A total of 3,396 stocks declined on the BSE as at 12 noon of all 4,055 stocks were traded. Only 546 stocks advanced and 112 remain unchanged. 506 stocks traded in the lower circuit and 236 traded in the upper circuit.

Asian indices traded in a sea of red, with Japan’s Nikkei posting its biggest single-day fall since 1987, down over 12 per cent, as disappointing US jobs data and a rise in the yen spooked investors. Taiwan Weighted and South Korea’s Kospi slid over 8 per cent.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said: “The rally in the global stock markets has been driven mainly by consensus expectations of a soft landing for the US economy. This expectation is now under threat with the fall in US job creation in July and the sharp rise in US unemployment rate to 4.3 per cent. Geopolitical tensions in the Middle East also are a contributing factor."

Valuations in India, driven mainly by sustained liquidity flows, continue to be high particularly in the mid and smallcaps segments, he added.

“The overvalued segments of the market like Defence and Railways are likely to come under pressure. The buy on dips strategy which has worked well in this bull run, is likely to be threatened now. Investors need not rush to buy in this correction. Wait for the market to stabilise,” said Vijayakumar.

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