Sensex falls 305 pts on China jitters; heavyweights drag

Apart from China woes, investors also bothered about further QE tapering because the inflow of foreign money may get impacted.

“Some sort of adjustment was expected after the quantitative easing (QE) tapering move that continued from the Fed. They are serious about it. It might happen in every meeting. So people are adjusting to that. Sooner it adjusts is better for our market. We make a base and from thereon we look ahead,” Neeraj Deewan of Quantum Securities said.

Among Asian markets, Japan’s Nikkei fell the most, down 2 percent while Kospi was down 1 percent. Shanghai declined 0.8 percent after the country’s factory growth slumped to a six-month low in January. European markets too reacted negatively with the CAC, DAX and FTSE falling over 0.6 percent at the time of closing of Indian market.

Back home, foreign institutional investors sold more than Rs 3,000 crore worth of Indian shares last week.

India's HSBC Manufacturing Purchasing Managers' Index (PMI) increased to 51.4 in January, highest since March 2013, as against 50.7 in pervious month. The rise in PMI was led by output and new orders, with the latter supported by an improvement in new export orders, the report said.

All sectoral indices barring healthcare saw selling pressure. BSE Metal lost over 3 percent on China jitters while Realty, Auto, IT, Bank, Oil & Gas, Power and Capital Goods indices were down 1-2 percent.

Aluminium major Hindalco Industries was the biggest losers among Sensex 30, falling 5.5 percent followed by Tata Steel with 3.6 percent loss.

Country’s largest lenders State Bank of India and ICICI Bank, and housing finance company HDFC fell over a 2 percent.

Among autos, Tata Motors plunged 3.8 percent, may be on apprehensions that China slowdown might impact its UK subsidiary Jaguar and Land Rover’s sales growth as China is one of the growth drivers for JLR sales. Bajaj Auto lost 3.5 percent.

State-run capital goods major BHEL and oil & gas company ONGC slipped 2-3 percent. Technology stocks like Infosys, Wipro and TCS were down 1.5-2 percent.

Bharti Airtel shares dropped 3 percent as sources say it is one of the top three contenders in bidding for spectrum auction. Analysts worried about its earnings because huge spending for auction may have an impact on top telecom operator’s profitability.

Tata Power lost 1.7 percent on profit booking. The stock was up over 3 percent in morning after the company last week sold entire 30 percent stake in PT Arutmin Indonesia coal mines via subsidiaries for around USD 500 million.

However, BSE Healthcare Index was up over a percent as pharma majors Sun Pharma and Dr Reddy’s Labs climbed over a percent.

Lupin, which acquired Netherlands-based Nanomi BV today, reported record profit of Rs 476 crore, a year-on-year growth of 42 percent led by strong growth in US in Q3FY14. The stock gained 4.5 percent.

Indraprastha Gas gained 8 percent and GAIL rose 2 percent despite oil minister Veerappa Moily reduced CNG price by Rs 15 per kg.

Declining shares outnumbered advancing ones by a ratio of 1419 to 1086 on the BSE.