Mumbai: The BSE Sensex and Nifty posted their biggest fall in 7-1/2 weeks on Monday, as IT services exporter Infosys slumped after its founders sold the company's stock, while metals and mining firms tumbled on data showing an unexpected fall in China's imports.
Recent outperformers also took a hit on a slew of worrisome global factors, including stronger-than-expected United States jobs data that raised the prospect of early US rate hikes and a ratings downgrade for Italy.
Adding to the concerns, overseas investors have also started taking profits. Foreign institutional investors sold Indian shares worth Rs 109 crore on Friday.
"Today's fall was basically on tech stocks, especially on Infosys, and investors booked profits in banks. However, nothing fundamentally went wrong. Perhaps fundamentals are far more positive now. We expect more reforms to go through in this (parliament) session," said Deven Choksey, managing director, KR Choksey Securities.
The benchmark BSE Sensex closed 1.19 per cent lower at 28,119.40, while the broader Nifty ended down 1.17 per cent at 8,438.25.
Infosys shares led the losses. The stock fell 4.8 per cent, its biggest single-day fall since May 29, after some of the company's founders sold shares worth $1.1 billion.
The founders and their families sold 32.6 million shares in Infosys at a fixed price of Rs 1,988.87 each, a 4 per cent discount to Friday's close.
Metals and mining stocks fell after China's imports shrank unexpectedly in November while export growth slowed, fuelling concerns the world's second-largest economy could be facing a sharper slowdown. Tata Steel closed down 2 per cent, Hindalco Industries ended 2.5 per cent lower while Sesa Sterlite fell 3.7 per cent. Some recent outperformers also closed lower. Mahindra and Mahindra, which gained 5.4 per cent in the past 10 sessions, closed down 3.5 per cent.
Banks also fell on profit-taking. State Bank of India closed down 1.5 per cent after gaining 18.9 per cent in November. ICICI Bank ended 1.7 per cent lower. It was up 7.9 per cent in the previous month.
Among the gainers, ITC closed 1.7 per cent higher, adding to its 2.1 per cent gain in the previous session after reports the government was rethinking a potential ban on the sale of loose cigarettes.
Shares in Dolphin Offshore gained 4.7 per cent after its Mexican client extended a contract with the company for three more years.
Copyright: Thomson Reuters 2014
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