Mumbai: Logging their worst drop in over five weeks, Sensex Monday fell 244.48 points to end at below 27,000 mark and Nifty slid 63.50 points to below 8,100 level on US rate hike fears and tepid China data, despite domestic inflation in August easing to nearly five-year low.
The rupee depreciated against US dollar to 61.14 levels, further dampening market sentiments, said equity brokers.
Wary market participants preferred to book profits as they expected early hike in interest rates by the US Federal Reserve. Higher US rates is likely to trigger capital outflows in emerging markets, including India. Fed's two-day policy setting meeting starts tomorrow.
Metal shares suffered the most after lacklustre Chinese factory output indicated slowdown in world's second biggest economy. Asian markets also retreated reacting to China data.
Refinery, IT, capital goods and FMCG stocks in Indian markets also attracted profit-booking while some of the pharma and realty counters closed with gains, said traders.
The BSE 30-share Sensex resumed lower in line with sluggish Asian trends on the back of Friday's fall on Wall Street. It gradually moved down further to settle at a two-week low of 26,816.56, down 244.48 points or 0.90 percent. Today's drop is its worst fall since August 8, 2014.
Worries over weak IIP growth that slowed to 4-month low of 0.5 percent in July weighed even wholesale inflation fell sharply in August to 3.74 percent, nearly 5-year low.
Similarly, the 50-issue NSE Nifty also dipped by 63.50 points or 0.78 percent, also its biggest loss since August 8, to two-week low levels of 8,042.
"Benchmark indices ended lower for the day, driven lower by weak global markets. The policy meeting of the US Fed continued to be in focus. Markets are awaiting signals from the Fed, if any, on the timing of interest rate hikes," said Dipen Shah, Head- PCG Research, Kotak Securities.
With CPI inflation data (7.8 percent y-o-y in August) already getting released last week, markets chose to ignore WPI data and focussed on the US Fed meeting, he added.
Oil prices sank. US benchmark West Texas Intermediate for October delivery eased 74 cents to USD 91.53, while Brent crude for October rose 39 cents to USD 97.50 in afternoon trade.
Barring China, other Asian markets closed lower between 0.06 percent and 0.99 percent on weak Chinese factory output data. Japan market was closed today for holiday. European stocks, excepting German, were trading lower. The CAC was down by 0.37 percent and the FTSE by 0.26 percent while the DAX was up by 0.10 percent.
US stocks also ended lower on last Friday as investors looked ahead to a Federal Reserve meeting due on 16-17 September 2014.
However, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 182.80 crore on last Friday as per the provisional data issued by stock exchanges.
Jignesh Chaudhary, Head Of Research, Veracity Broking Services said: "Local equities dropped taking cues from weak global stocks on anxiety about early Fed rate hikes and China factory output. India reported weaker-than-expected industrial production, tempering optimism about an economic recovery."
Moving to the domestic market, 25 scrips out of the 30-scrip Sensex pack ended lower while others finished higher.
Major losers from the Sensex pack were Hindalco (3.08 percent), Tata Steel (2.06 percent), Sesa Sterlite (1.86 percent), ONGC (1.83 percent), Coal India (1.66 percent), HDFC (1.58 percent), TCS (1.54 percent), M&M (1.36 percent), Wipro (1.35 percent), NTPC (1.34 percent), Sun Pharma (1.30 percent), Axis Bank (1.24 percent), L&T (1.17 percent), RIL (1.15 percent), Bharti Airtel (1.09 percent), ITC (1.03 percent) and ICICI Bank (1.02 percent).
Among gainers, Cipla rose 2.15 percent, Hero Moto Corp 1.56 percent, Dr Reddy 0.53 percent and HDFC 0.51 percent.
Among the S&P BSE sectoral indices, Metal fell by 1.69 percent, Oil & Gas 0.96 percent, IT 0.96 percent, Capital Goods 0.89 percent and FMCG 0.89 percent.
Total market breadth remained strong as 1,757 stocks closed in the green, 1,301 finished in the red. Market turnover dropped to Rs 3,604.95 crs from Rs 3,722.52 crore on last Friday.
