Sensex plunges by 516 points; bank stocks sink

A benchmark index of Indian equities markets, the 30-scrip Sensitive Index (Sensex), on Tuesday plunged by 516 points or nearly 2 percent during the mid-afternoon trade session.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading deep in the red. It was down 167.40 points or 2.01 percent in the mid-afternoon session at 8,157.85 points. The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 27,502.91 points, slumped and was trading at 26,991.74 points (at 1.45 p.m.) in the mid-afternoon session, down 515.56 points or 1.87 percent from the previous day's close at 27,507.30 points.

The Sensex has touched a high of 27,502.91 points and a low of 26,927.82 points in the intra-day trade so far. "The markets have fallen due to a combination of factors such as uncertainty over the US interest rate hike, higher commodity prices like crude oil and increase in US 10-year bond yields," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.

"Domestic factors such the outcome of the parliament session and the dissapointing quarterly results have also dampened sentiments." Another major trigger for the fall was the investor anxiety over the US Federal Reserve's reaction to the better-than-expected growth in the non-farm jobs in the US. Growth in jobs has the ability to push the Federal Reserve to increase interest rates, thereby attracting funds back into the US equities' market.

In Tuesday's trade so far all 12 sector-based indices were trading in the red. The S&P BSE banking, capital goods, automobile, metal, oil and gas, information technology (IT) and consumer durables indices came under heavy selling pressure. The S&P BSE Bank index plunged by 529.65 points, followed by capital goods index which declined by 449.02 points, automobile index decreased by 310.12 points, metal index was lower by 276.92 points and oil and gas index fell by 225.06 points. The S&P BSE IT index edged lower by 169.51 points and consumer durables index was down by 156.11 points.