Nifty drops 175 points to end below 7,800

Provisionally, S&P BSE Sensex lost 542 points to end at 25,619 and the Nifty50 shed 175 points to end at 7,789

Markets winessed a massive sell-off after the sluggish Chinese manufacturing data and growing concerns in the Middle East casted a shadow.

Provisionally, S&P BSE Sensex lost 542 points to end at 25,619 and the Nifty50 shed 175 points to end at 7,789.

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(updated at 2:50 PM)

A blood bath is seen across the bourses with barometer index Sensex falling over 500 points after the sluggish Chinese manufacturing data and growing concerns in the Middle East casted a shadow.

At 2:50 pm, the S&P BSE Sensex was down 534 points at 25,627 and the Nifty50 was down 171 points at 7,793.

Meanwhile, Indian manufacturing activity contracted in December for the first time in more than two years on the back of softening domestic demand coupled with weak rupee dampened sentiments. Nikkei's Manufacturing Purchasing Managers' Index, compiled by Markit, fell to a 28-month low of 49.1 in December from November's 50.3. It was also the first reading below the 50 threshold that separates growth from contraction since October 2013.
 

Trading was suspended after weak December manufacturing data which showed contraction for the 10th consecutive month led to sharp sell-off in stocks dragging the benchmark Shanghai Composite by 7.4%. The heavy-sell off in Chinese stocks triggered a new system meant to limit volatility. The measures were introduced in early December after the stock market's steep fall over the summer. Among other markets in the region, Japan’s Nikkei, Hong Kong’s Hang Seng and Singapore’s Straits Times fell between 1-4%.

Growing tension between Saudi Arabia and Iran allowed oil prices to soar in the first trading session of 2016, indicating the manner in which the unstable political situation in the Middle East could complicate the outlook for oil prices in 2016.

STOCKS & SECTORS

A broad-based sell-off is witnessed across all the sectors with BSE Bankex and Telecom indices leading the fall down between 2%-3%.

Banks which are a proxy to the economy were the top losers amid weak December manufacturing PMI. ICICI Bank, HDFC Bank, Axis Bank and SBI were down 1.5%-2.6% each. IDBI Bank, Bank of Baroda, Punjab National Bank (PNB), Oriental Bank of Commerce, Syndicate Bank, Allahabad Bank and Union Bank of India from the public sector undertakings (PSUs) were down more than 3% each.

Meanwhile, telecom stocks got hit post the order from the Telecom Regulatory Authority of India (Trai) that has written to operators to ensure compliance with call drop regulations, effective January 1. However, service providers remain defiant and say compensation to subscribers will be paid only after court orders them to do so. Bharti Airtel, Reliance Communication, Idea Cellular have all dropped between 4%-7% each.

Another sector trading under selling pressure is the Auto pack post the December sales numbers. Among individual names, Tata Motors fell 5.4% on recording a 4% decline in sales at 39,973 units for December as against 41,734 vehicles in December 2014. Further, Hero MotoCorp dipped 2% after the total two-wheeler sales declined 5.13% to 4.99 lakh units in December 2015 over December 2014. Bajaj Auto inched down on posting a marginal decline in total sales in December at 2,89,003 units as against 2,89,244 units during the same month last year.

Meanwhile, metal stocks reeled under pressure following by a weak PMI data in China. Hindalco, Tata Steel and Vedanta dropped between 1%-4%.Coal India slipped 1% as offtake for December 2015 was lower at 48.16 mt against a target of 49.46 mt.

Prominent losers of the Sensex include Adani Ports, BHEL, Lupin, RIL and GAIL falling between 2%-3%.