Slowdown fear drags Indian indices

On Thursday was the biggest single-day fall for the Sensex since November 21. It lost 389 points, to close at 16,488.24.

Indian indices saw their biggest fall in nearly three weeks, as investor pessimism grew on doubts related to the health of the economy. The fact that the government had been unable to push reforms also hit sentiment. The ongoing concerns on euro zone default was another catalyst.

The 30-share Sensex lost 389 points, or 2.3 per cent, to close at 16,488.24, a tad above the day's low of 16,421.55. This is the biggest single-day fall for the benchmark index since November 21. The Sensex has already declined nearly 20 per cent this year, becoming one of the worst-performing indices of the world.

Meanwhile, the broader 50-share Nifty lost 118.95 points, or 2.35 per cent, to end the day below the psychological mark of 5,000 at 4,943.65. Technical analysts are now predicting the broader barometer to trade lower till 4,800. "Key supports in the immediate run are around 4,930-4,880 and resistance will be faced at 5,000-5,040," said Sharekhan in a note to its clients.

Investor sentiment was also dampened on account of reports that industrial output had declined by seven per cent in October, for the first time in the negative territory since June 2009. As a result, the BSE Capital Goods index was the worst hit, shedding 444 points or 4.4 per cent. ABB, Punj Lloyd, L&T, BHEL and BGR Energy lost over four per cent each.

On the political front, the mood also took a beating on account of a fresh development in the ongoing 2G spectrum case. The court permitted Janata Party chief Subramanian Swamy to testify once again. Based on the new material, the court will decide if home minister P Chidambaram can be summoned.

According to dealers, doubts if a European Union summit would be able to tackle their debt problems also kept investors wary, because the crisis could trigger foreign fund withdrawals from emerging markets like India.

According to provisional numbers, on Thursday, foreign institutional investors were net buyers to the tune of Rs 26 crore, while domestic institutions sold shares worth Rs 197 crore.

Among index heavyweights, Bharti Airtel, Coal India, DLF, HDFC Bank, Hindalco, ICICI Bank, Jindal Steel, M&M, RIL, SBI and Tata Steel lost significant ground.