 "Sensex drops to 3-week low amid global sell-off")
India's benchmark stock index slid to a three-week low in the final stretch of trading, as losses in European equities after China weakened the yuan raised concerns about global growth.
ITC, the largest tobacco company, was the worst performer on the BSE, while Hindustan Unilever fell to a three-week low. Tata Motors paced losses among automakers after the government said it would directly adopt the more stringent BS-VI emission norms starting 2020, from BS-IV at present.
The Sensex fell 174 points or 0.7 per cent to close at nearly 25,406, with bulk of the losses coming after European equities began trading at 1:30 pm local time. The Nifty also remained under pressure and dropped about 44 points or 0.6 per cent to close at 7,741. The Stoxx Europe 600 Index slid 1.1 per cent and futures on the Standard & Poor's 500 Index lost 1.4 per cent. Indian equities tumbled the most in three months on Monday, as concern over a slowing Chinese economy and tension in the West Asia spurred a sell-off in Asian equities.
"We sold off because of weak European markets," Jagannadham Thunuguntla, head of fundamental research at Karvy Stock Broking in Hyderabad, said in an interview with Bloomberg TV India on Wednesday. The weakness "is a temporary global phenomenon and it is a good time for investors to start their homework on stock selection," he said. The Sensex fell last year for the first time since 2011, as global funds sold emerging-market assets and corporate earnings failed to recover.
Foreign investors sold a net $37 million of Indian stocks on January 5. They bought $3.3 billion of shares last year, the smallest in four years.
The Sensex trades at 15.2 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 10.8.
