Sensex Falls Over 300 Points; ITC Shares Slump

The BSE benchmark Sensex fell over 300 points in trades on Monday on the back of selling in FMCG, metal and capital goods stocks.

The 50-share Nifty settled at 8,370 led by losses in blue-chip stocks such as ITC, Tata Motors and HDFC.

The Sensex saw its worst daily fall since May 12.

Meanwhile, Federal Reserve Chair Janet Yellen indicated on Friday the US central bank was poised to raise interest rates this year if the world's top economy improved as expected.

Caution also prevailed ahead of gross domestic product growth data due on Friday. Domestic shares have been on a solid path so far this month, recovering from a volatile April amid continued hopes of an economic recovery.

"The worst is behind us, things should improve. The government is continuing with investment acceleration" said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.

From the Nifty-50 basket of stocks, 36 stocks declined while 14 stocks advanced. 

ITC was among the top Nifty losers, the stock ended 3.75 per cent lower at Rs 317 shares in cigarette maker fell after it reported that its fourth quarter net profit came in at Rs 2,361 crore which was less than analysts expectation of Rs 2,528 crore. 

Meanwhile, international brokerage CLSA has maintained its 'sell' rating on the stock. It expects pressure to continue in the first half of calendar year and has cut its EPS estimate by 2-3 per cent.

Ambuja Cement, Vedanta, Tech Mahindra, HDFC, Tata Steel, Tata Motors, Tata Power, Infosys, State Bank of India, Larsen & Toubro and HUL were also among the losers on the Nifty.

On the other hand, Lupin jumped 1 per cent to close at Rs 1,753 after the BSE announced that it will become part of the Sensex and will replace Tata Power.

ONGC, Bank of Baroda, Power Grid, BPCL and Bharti Airtel were also among the gainers.

The mid-cap and small-cap indices also closed lower.

The Sensex finally ended 314 points lower at 27,644 and the Nifty fell 89 points to shut shop at 8,370.

(With inputs from Reuters)