Sensex drops 382 pts to post biggest single-day fall in nearly 2 months; metals, banking, IT stocks crumble

Equity markets came crashing down after a two-session relief rally, posting its biggest single-day fall in nearly two months and in the process eroded all its gains registered in last two days. Reversing the bearish trend earlier this week, equity markets gained 250 points on selective buying before losing momentum today to tumble more than 400 points in intra-day trade. [caption id=“attachment_2512016” align=“alignleft” width=“380”]  Reuters[/caption] Mirroring the weakness in global markets, investors resorted to frantic selling in software, banking and metal stocks, dragging the benchmark Sensex to the day’s low of 25,453.32, down 411 points. Trimming some losses, the 30-share BSE S&P Sensex finally wrapped up the session at 25,482.52, down 381.95 points, or 1.5 percent from previous close. The broader 50-stock CNX Nifty closed at 7,731.80, down 105.75 points, or 1.3 percent. Market breadth ended weak, with 1,615 stocks declining against 1,045 advances on BSE. Among the Asian peers, key Chinese indices Shanghai Composite dropped 1 percent and Hang Seng ended 0.3 percent lower while Japan’s Nikkei ended flat with a positive bias. Major European gauges were down around 0.5-1 percent in mid-day trades as investors turned cautious in the aftermath of Paris terrorist attacks. Also, China’s fragile economy coupled with Japan slipping back into recession in the last quarter and US Fed moving towards its first likely rate hike in seven years next month, investors worldover are feeling the jitters, leading to exodus of fund outflows from emerging markets, including India. So far, in the current month, FIIs have turned net sellers of shares to the tune of over Rs 3,000 crore in the domestic equity market. Metal shares were the worst hit as the slowing Chinese economy and the resultant slump in global commodity prices continued to weigh. Shares of Hindalco tumbled 5.1 percent to Rs 76.70, Tata Steel declined 3.7 percent to Rs 225.85 and Vedanta eased 3.1 percent to Rs 89.20. Software major Infosys dropped 3.9 percent to Rs 1,019.85, as investors cut their holdings after the company recently said its third quarter earnings will be muted due to cautious IT spending by its international clients. Banking laggards such as SBI fell 2.8 percent to Rs 241.05, ICICI Bank declined 2.7 percent to Rs 260.25, Axis Bank lost 2.4 percent to Rs 463.60 and HDFC Bank was down 1.2 percent at Rs 1,048.40.