Sensex, Nifty nosedive on broad-based selling pressure

The Indian equity benchmarks extended losses in noon deals after nosediving in morning deals on Monday dragged down by weakness in ICICI Bank , Reliance Industries, Infosys , Mahindra & Mahindra , Tata Consultancy Services, Axis Bank and HDFC Bank amid mixed cues from Asian markets. The Sensex fell as much as 1,041 points to hit an intraday low of 84,530 and Nifty 50 index dropped below its important psychological level of 26,000.

As of 11:58 am, Sensex dropped 982 points or 1.14 per cent to 84,588 and Nifty 50 index dropped 283 points to 25,895.

Asian markets were trading on a mixed note as Japan's Nikkei dropped over 4 per cent in reaction to a sharply stronger yen after perceived monetary policy hawk Shigeru Ishiba won the contest to become the country's prime minister.

A known critic of the Bank of Japan's extraordinary stimulus of the previous decade, Ishiba beat monetary-policy dove Sanae Takaichi in a close contest on Friday that was decided after share markets had already closed. He is due to become premier on Tuesday.

On the other hand, China's stocks surged after its central bank on Sunday said it would tell banks to lower mortgage rates for existing home loans before Oct. 31, as part of sweeping policies to support the country's beleaguered property market as the economy slows.

China's CSI 300 index rose 3.45 per cent, Shanghai Composite climbed 3 per cent, SZSE Component index advanced 5 per cent and Hong Kong's Hang Seng gained 4.5 per cent.

Meanwhile, selling pressure was broad-based as ten of 13 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty Realty index's 1.5 per cent fall. Nifty Auto, Bank, Financial Services, IT, Media, PSU Bank, Private Bank and Oil & Gas indices also fell between 0.5-1.35 per cent.

On the other hand, metal shares were witnessing buying interest on the back of more stimulus measures announced by China to boost its economy.

Mid- and small-cap shares were also facing selling pressure as Nifty Midcap 100 index fell 0.5 per cent and Nifty Smallcap 100 index declined 0.5 per cent.

Hero MotoCorp was top Nifty loser, the stock fell 3 per cent to Rs 5,784. Mahindra & Mahindra , Coal India, Tech Mahindra , Bharat Petroleum, Bharat Electronics, ICICI Bank , Axis Bank , Tata Motors, Reliance Industries and Maruti Suzuki also fell between 1-2 per cent.

On the flipside, Hindalco, Tata Steel, JSW Steel , NTPC, Titan, Britannia and Asian Paints were among the gainers.

The overall market breadth was negative as 1,909 shares were declining while 1,244 were advancing on the BSE.

(With Reuters inputs)