Sensex Falls 296 Points as Metals, Cap Goods Slump

The BSE Sensex fell over 300 points to an intra-day low 26,250 and the Nifty fell to 7,842 because of sharp selloff in metal, pharma and capital goods stock.

The metal sub-index on the BSE dropped 2.7 per cent on concerns of slower growth in China. Lower commodity prices also weighed on sentiments. A sharp fall in commodity prices will impact profit margin of metal companies, analysts say. Hindalco Industries, JSPL and Sesa Sterlite fell nearly 4.5 per cent each.

Pharma stocks also witnessed selling pressure today. The CNX Pharma index was down 2.2 per cent after rallying over 2 per cent last week. Cipla, Sun Pharma, Ranbaxy were down between 3 to 4 per cent each.

The BSE Capital Goods index fell over 2 per cent as stocks like L&T, Bhel and Siemens were down between 2-3 per cent each.

On the 50-share Nifty, realty major DLF was the top loser, down 6 per cent. Power Grid Corporation, NTPC and Gail were among the top gainers in Nifty, rising around 1 per cent each.

Indian stock markets are witnessing some correction after rising for four straight quarters. The Sensex and Nifty have hit a series of record highs this year and analysts have been expecting a correction after the strong rally.

Foreign investors continued to remain net sellers of Indian equities. FIIs had sold shares worth Rs. 63 crore on last Wednesday.

Avinnash Gorakssakar, founder director at Moneyinvestments.in says, in the absence of large FII inflows Nifty could test 7,800 levels. Mr Gorakssakar believes cyclical and rate sensitive stocks could pause for a while.

The Sensex closed 296 points lower at 26,272, while the Nifty declined 1.17 per cent to close at 7,852.