Sensex plunges 324 points; capital goods stocks fall

A benchmark index of Indian equities markets closed Tuesday's trade around 324 points down, as capital goods, banks and automobile stocks plunged.

This is the second consecutive sell-out in the market triggered by weak industrial data and anxiety over the US Fed stimulus cut.

The market fell by more than 250 points Monday. Investor sentiment has turned bearish after days of rally in the market.

Analysts point out that the sour sentiment is a reaction to slow industrial growth data coupled with anxiety regarding global cues such as the US Fed rate hike and the upcoming China factory output.

The industrial activity data, measured in terms of the Index of Industrial Production (IIP) has been below expectations. It only grew 0.5 percent in the month of July over the same month of the previous year.

India's retail inflation too slowed down marginally at 7.8 percent in August from 7.96 percent in the previous month.

However, India's annual rate of inflation, based on official wholesale price index, gave some relief to the market as it fell to a near-five-year low of 3.74 percent for August.

The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,854.90 points, closed trade at 26,492.51 points, down 324.05 points or 1.21 percent from the previous day's close at 26,816.56 points.

The Sensex touched a high of 26,861.29 points and a low of 26,464.03 points in the intra-day trade.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) fell below the 8,000-mark. It closed the day's trade down 109.10 points or 1.36 percent at 7,932.90 points.

All sectoral indices at the BSE closed the day's trade in red.

Capital goods, banks, automobile, oil and gas, consumer durables and healthcare stocks sustained heavy selling pressure.

The S&P BSE capital goods index was down 411.61 points, bank index slipped by 369.47 points, automobile index plunged 310.11 points, oil and gas index was lower by 300.50 points, consumer durables index declined by 246.74 points and healthcare index lost 187.33 points.