Indian stocks fall to 21-month low

Sensex, Nifty slide 1% each for 3 days

Indian stocks slid more than one per cent for a third straight session on Wednesday, dragging the benchmark indices down to 21-month low, their lowest levels since May 15, 2014.

The key benchmark indices opened in the negative zone over concerns over the health of the global economy. The BSE Sensex ended down 262 points, or 1.1 per cent, at 23,759, below the psychologically important mark of 24,000. The 50-share Nifty slid 82.5 points, or 1.13 per cent, at 7,216. The benchmark indices have slipped about four per cent in the past three sessions and have come off nearly 21 per cent from the peak hit early last year.

"The mood in the market clearly seemed in the risk-off mode, while investor sentiment remained weak as participants opted to exit existing long positions. Weakness in the Asian region and overnight losses in the US markets added to investor woes," said Shreyash Devalkar, fund manager, stocks, BNP Paribas Mutual Fund.

Foreign Institutional Investors (FIIs) sold shares worth over Rs 751 crore on Wednesday, while domestic institutions were net buyers of Rs 196 crore, provisional data showed. Sell-off by foreign investors, triggered by a drop in oil prices, have dashed hopes of any pre-Budget rally in the Indian markets. In the year to date, FIIs have sold shares worth $2 billion.

Japan's benchmark index Nikkei 225 extended losses on Wednesday, after posting its biggest daily drop in nearly three years a day before, amid a sharp rise in the country's currency yen.

On Monday, India's Gross Domestic Product (GDP) expanded at a slower clip of 7.3 per cent in the third quarter of the current financial year compared with a growth of 7.7 per cent in the previous quarter. However, the estimated GDP growth for FY16 was revised to 7.6 per cent from 7.1-7.5 per cent earlier.

European stocks were trading in the positive territory on Wednesday, snapping a seven-day fall. The FTSE, DAX, and CAC, were trading up between one and 2.3 per cent.

Most of the Asian stocks ended in the red on Wednesday. Besides Japan's Nikkei, Shanghai Composite, Jakarta Composite, Taiwan SE, and Straits Times Index, ended lower between 0.6 and 1.5 per cent. Hang Seng, however, bucked the trend, gaining 0.5 per cent.

Back home, market breadth was weak with 2,036 or 74 per cent of stocks declining and 608 stocks gaining. Two-thirds of Sensex components declined. All the sectoral indices on the NSE (National Stock Exchange) traded in the red, with the banking, media, metals, automobile, and pharmaceutical indices losing more than one per cent each. Public Sector Undertaking (PSU) banks were severely hit, with the NSE PSU Banking index falling over four per cent on disappointing earnings, especially from state-run banks.