Chinese checkers: Sensex tanks 541 pts on late sell-off, metal shares take pounding

Domestic shares came down crashing in the last hour of trade with benchmark Sensex tumbling more than 600 points primarily driven by a sharp slump in European markets, where investors offloaded their holdings ahead of a key Chinese data scheduled to be announced on Wednesday. While stocks across the board faced the bear hammering, metal scrips bore the major brunt after commodity stocks listed on key European gauges faced intense selling pressure in anticipation of a disappointing Chinese PMI data for September. Also, short-selling by investors ahead of the current (September) month’s futures & options (F&O) expiry resulted in a sharp slide in the markets, said dealers. [caption id=“attachment_2442302” align=“alignleft” width=“380”]  PTI[/caption] Tuesday, the 30-share BSE S&P Sensex ended the session at 25,651.84, down 541.14 points, or 2.1 percent from previous close. In fact, the index, which rose nearly 150 points to touch the day’s high of 26,339.10 in the first half, faltered sharply in late trades and crumbled to an intra-day low of 25,571.34, down 622 points. Similarly, the 50-stock CNX Nifty, which had breached the crucial 8,000-mark in the first few minutes of the start of trade, too, lost ground and closed at 7,812, down 165.10 points, or 2.1 percent. The breadth of the market ended weak, with 1,711 stocks declining against 969 advances on BSE. While key Chinese equity indices, Hang Seng & Shanghai Composite, ended in green, major European gauges receded in mid-day trades. All key gauges - FTSE, DAX and CAC - were down over 1-2 percent each. While China’s flash Caixin purchasing managers’ index (PMI) for September will be announced tommorrow, investors seemed sceptic, especially, after the final Caixin/Markit PMI slipped to 47.3 in August, the lowest reading since March 2009. “Indian markets reacted mainly to fall in European shares. There is a feeling that Chinese PMI data for September will also be bad, which is why we saw a sharp fall in metal stocks. Already, the world is facing severe economic headwinds due to lingering slowdown in China, and a disappointing data will further add to the worsening sentiment,” said Dipen Shah, Senior Vice President at Kotak Securities. Among the metal laggards, shares of Vedanta tumbled 6.3 percent to Rs 92.35, Hindalco plunged 6.2 percent to Rs 73.15, Coal India dropped 5.4 percent to Rs 323.85, Jindal Steel shed 5.2 percent to Rs 61.75 and Tata Steel eased 3 percent to Rs 220. Banking shares, too, felt the heat ahead of the RBI policy meet on September 29. Shares of Axis Bank declined 3.6 percent to Rs 509.05, HDFC fell 3.2 percent to Rs 1,167.85, SBI lost 3 percent to Rs 237.90 and HDFC Bank was down 2.4 percent at Rs 1,027.60.