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Sensex tumbles 275 pts on growth concerns

business Updated: Dec 09, 2011 17:17 IST

The Bombay Stock Exchange benchmark Sensex on Friday dropped 275 points, recording the biggest two-day fall in three months, as investors pulled out funds on fears of slowing economic growth and a weak trend Asian markets.

Citing global and domestic factors, the government on Friday lowered the GDP growth forecast for the current fiscal to 7.5% from 9%.

It also said it will not be easy to restrict the fiscal deficit to 4.6% in 2011-12 on account of uncertainty on the disinvestment front and a likely increase in subsidies.

The Sensex, which had lost 389 points in the previous session, fell further 274.78 points to 16,213.46, its biggest two-day loss since September 23.

The broad-based National Stock Exchange index Nifty declined 76.95 points to 4,866.70.

The market fall was led by of refinery, auto and capital goods sectors.

Sensex heavyweight Reliance Industries dropped 3.05%, while Infosys fell 0.65%. The two carry about 20% weight on the BSE 30-share index.

Brokers said RIL also declined on reports that Nomura downgraded its stock to 'neutral' from 'buy'.

Other major losers included Bajaj Auto, M&M, HDFC Ltd, ICICI Bank, L&T, BHEL, Jayprakash Associate and ONGC.

Asian stocks also fell for the second day amid the lingering euro-zone debt crisis and slow global growth.

The capital goods sector index suffered the most, down 2.58% to 9,394.87, followed by auto index - 2.26% to 8,521.71. Oil and gas index dropped 2.04% to 8,021.95 and power index by 1.80% to 1,924.94.