Markets tumble on rising risk aversion

Mumbai: Key stock indices Sensex and Nifty declined over one per cent at close on Monday due to heavy selling in banking, auto and FMCG shares amid weak global market trends and continued foreign fund outflows.

Reversing its previous session's gains, benchmark BSE Sensex tumbled 638.11 points or 1.11 per cent to settle at 56,788.81. During the day, it tanked 743.52 points or 1.29 per cent to 56,683.40. The broader NSE Nifty fell by 207 points or 1.21 per cent to end at 16,887.35 as 42 of its constituents declined.

"Markets started the week on a feeble note and lost over a per cent, tracking weak global cues,"said Ajit Mishra, V-P (research), Religare Broking Ltd.

Foreign institutional investors (FIIs) turned sellers in September, pulling out Rs 7,600 crore from Indian equity markets.

"Global markets are expected to stay under pressure due to the confluence of an unfavourable economic outlook and investor risk aversion. Global markets were in pain as economic data forecast to shed lower as indicated by high-frequency indicators in European regions like UK PMI is consequently down below 50 showing contraction in economy. As demand slowed, India's manufacturing PMI declined slightly to 55.1 in September. As a result, all the key sectors were pressured by selling, except pharma & Oil stocks," Vinod Nair, head (research) at Geojit Financial Services.

In the broader market, the BSE midcap gauge declined 1.24 per cent and smallcap index fell by 0.54 per cent. Among the BSE sectoral indices, power fell by 3.24 per cent, utilities by 3.14 per cent, auto (2.11 per cent), FMCG (2.05 per cent), commodities (2.01 per cent), consumer discretionary (1.26 per cent) and realty (1.24 per cent). Healthcare and telecommunication ended in the green.