The BSE benchmark Sensex on Friday rose to a nine-week high of 19,131.70 but later tripped by more than 220 points as investors sold bluechips, especially metal and mining stocks, on worries that new mining draft would hurt corporate earnings besides a likely cabinet shuffle next week.
The Bombay Stock Exchange benchmark Sensex, which had gained 350 points in the previous session, closed down 220.26 points at 18,858.04 as metal, refinery and banking stocks suffered heavy losses in volatile trading.
Broad-based National Stock Exchange index Nifty ended 68.30 points lower at 5,660.65.
Brokers said metal and mining sector stocks sank on concerns that the proposed new mining policy would lower earnings of companies such as Coal India and Sterlite Industries.
A Group of Ministers on Thursday approved the draft of Mines and Mineral Development and Regulation Bill, 2011, according to which coal miners will have to share 26 per cent of their profits with project-affected people. Other resources mining companies would have to pay 100 per cent of the royalty on production to locals on the project site, as per the draft.
Coal India, the world’s biggest miner fell 8.18 per cent and leading zinc and copper producer Sterlite Industries lost 3.94 per cent to Rs 163.40. Hindalco dropped by 3.73 per cent and Sesa Goa by 4.17 per cent.
Metal sector index lost 2.99 per cent, FMCG index fell 1.14 per cent, Oil and Gas sector index 1.13 per cent and Banking index by 1.11 per cent.
Market leader Reliance Industries dropped 1.83 per cent to Rs 854.40 a piece.