Sensex slumps 600pts in panic selling

The markets after a start took a sharp dip in mid-morning trades on panic selling on reports that tax treaty talks between India and Mauritius are likely to resume soon. The Sensex tumbled to a low of 17,314, and is now down nearly 300 points at 17,577.

In the doing so, the index almost revisted its February low of 17,295. The NSE Nifty has plunged 100 points at 5,272.

Stocks with investment in Mauritius have collapsed on reports that tax treaty talks between India and Mauritius are likely to resume soon. Over 40% FDI in India comes from Mauritius. KS Oils (down nearly 25%), Deccan Chronicle (down nearly 6%), Lanco Infra (down nearly 13%), Delta Corp (down nearly 12%), S Kumars (down nearly 7%), Cipla (down nearly 5%), Hindalco (down nearly 4%), JP Associates (down nearly 4%), Grasim (down nearly 5%), HCL Tech, DRL and Wipro (down nearly 4%), HDFC Bank (down nearly 3%), IDFC (down nearly 6%).

The Sensex had opened up 21 points at 17,891 and the Nifty, which slipped into red soon after opening, was up five points at 5,371.

IT and Power indices weighed on the benchmark indices in early trade. These indices are down between 1 and 1.5%, respectively. Wipro, Tech Mahindra, TCS, HCL Tech, Infosys are all down 2-4%. Reliance Infra dragged the Power index after being removed from the Sensex, the stock is down 5.5%. Suzlon, Reliance Power, GVK Power, GMR Infra are others down over 3% each. Reliance Power’s 4,000 MW UMPP hits a roadblock, teh company may seek government’s help.

Metal index is the biggest sectoral loser, down 0.7%, pulled down by Welspun Corp (down almost 5%), JSW Steel (down 2.5%) and Hindalco (down 2%). Auto is the other laggard on BSE, down nearly 1%. Tata Motors, M&M are down 3% each, Amtek Auto, Apollo Tyres are down nearly 4% each.

RIL (down nearly 3%) has pulled down Sensex by 55 points, followed by Infosys, TCS and HDFC Bank, which have lowered Sensex by almost 30 points each. The stock is seeing selling pressure since last week. Reliance Communication is another big loser on the back of being excluded from Sensex, the stock is down over 8% on the Sensex.

Sugar stocks are in focus after the government rules out additional exports before next harvest. Balrampur Chini is down 4%, Sakthi Sugars down 6%, Shree Renuka down 3.5%.

Market breadth is extremely negative. Only 362 stocks are advancing against 1,920 declining stocks.

Broader markets have crashed. CNX MIdcap is down 214 points and BSE Small Cap is lower by over 250 points.

Other stocks in news are GTL Infra, which touched a new low of Rs 16.90, down 43% on the back of its $300 million fund raising plan being scrapped. Bank of India is flat on its plans to enter mutual fund business with Bharti AXA. Bombay Dyeing is down over 5% after coming under the  CCI scanner for dictating prices and sale terms.