Sensex drops on China's sharp fall, ends down 255 points

The Sensex snapped a seven-day winning streak and closed sharply lower on the back of sell-off in heavyweights and weak global cues. Selling in technology, telecom, metal, private power, FMCG, select banking and infrastructure companies' shares dragged the Nifty below 4700.

Fall across the globe was the main reason behind today's weakness. Shanghai started the decline in the early trade and as the day proceeded it extended its losses. It closed 6.7% lower at 2,667.745 and saw worst ever closing in the year 2009. It plunged 21.8% in the month of August and underperformed the other markets.

Ba Shusong, deputy director of the State Council's Development Research Center said that China's economic growth may start to slow in the second quarter of the next year as the impact of government stimulus policies diminishes.

Among the other Asian markets, Hang Seng and Straits Times fell 1.9% each. Jakarta and Kospi declined 1-1.5%. Nikkei fell 0.4% while Taiwan Weighted gained 0.24%. European markets were down 0.8% each and US index futures down 0.7% each, at the time of closing of Indian equities.

The 30-share BSE Sensex tumbled 255.70 points or 1.61%, to settle at 15,666.64, after seeing an intraday low of 15,589.80. The 50-share NSE Nifty touched a day's low of 4635, before closing at 4662.10, down 1.48% or 70.25 points.

Heavyweights like Reliance Industries, L&T, Infosys, Bharti Airtel and SBI dragged indices the most. The Nifty September futures were still at premium. The Nifty 4,600 Put and 4,900 Call saw big build-ups in today's trade.