The Indian equity market continued its downward spiral for the fourth day in a row on Thursday hit by panic in China and sliding crude oil prices.

Trading was again halted in mainland China after the CSI 300 index tumbled more than 7 per cent in early trade. This after The People’s Bank of China set the yuan’s daily reference rate at its lowest level since April 2011. China had lowered the yuan nearly 5 per cent against the dollar in August, sending tremors through global markets.

On the other hand, crude oil prices breached the $35 mark and slipped below $33 for the first time in 11 years. To top it all, the World Bank lowered its global economic growth forecast for 2016 to 2.9 per cent from its earlier 3.3 per cent.

Jayant Manglik, President, Retail Distribution, Religare Securities, said: “With the third devaluation in five months, investor sentiments have been dampened across the globe with fear rising over problems in China.”

Global mayhem Asian markets ended down 1-8 per cent while European markets were down 2.5-3.5 per cent. Indian benchmark indices S&P BSE Sensex and Nifty 50 also closed down by 2.2 per cent each. All the stocks in the Nifty 50 ended in the red.

“Having come at the start of the year, the sharp declines in Chinese equities, and the pace of the yuan depreciation has meant sentiments are much weaker than in September when similar issues rocked global markets,” said Anand James, Co-Head, Technical Research Desk, Geojit BNP Paribas Financial Services.

While the S&P BSE Sensex hit its 52-week low of 24,825.7, the Nifty 50’s low of 7,556.60 is very close to its 52-week low of 7,539.5.

If the Nifty breaches the next support level of 7,510, it can fall further to 7,350,” said Vivek Mahajan, head of research at Aditya Birla Money.

Stocks from the metal and mining sector, oil exploration and production firms and public sector banks led losses for key benchmark indices. Vedanta, Cairn India, BHEL, Tata Steel and Bank of Baroda were the top five losers and the five companies fell in the 6.5-9 per cent range.

ACC, Larsen and Toubro, State Bank of India, Punjab National Bank, Axis Bank and BHEL touched their 52-week lows while ICICI Bank’s ₹243.1 is close to its 52-week low of ₹243.05.

More pain Prateek Agarwal, business head and chief investment officer at Mumbai-based ASK Investment Managers, expects more pain and sell-offs until the Chinese currency stabilises.

All NSE sectoral indices traded in the red with metal, auto and energy stocks bearing the brunt of the selling pressure. In January till date, domestic institutional investors have bought ₹476.59 crore while FIIs have net sold ₹600 crore. FIIs sold ₹100 crore on Thursday while domestic institutional investors continued their buying spree.

Meanwhile, foreign brokerages expect the Indian equity market to bounce back. While UBS has estimated that the Nifty will touch 8,200 by the year-end, Macquarie and Goldman Sachs see it at 9,200 and 9,000, respectively.

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