Hectic selling towards the fag end of trade today pulled down the benchmark Sensex on the Bombay Stock Exchange by 167 points amid mixed cues in the Asian and European markets.
Snapping the 5-day winning streak, the bellwether index closed down by 166.93 points from its previous close.
Marketmen said Finance Minister Pranab Mukherjee’s remarks that he is not prescribing a tight money policy failed to lift the sentiment as investors squared off their positions ahead of the expiry of September contract in derivatives.
They also said investors booked profit after judging that the five-day gain was overdone.
The market had gained 672 points in the past five days on expectations of robust Q2 results by corporate and on signs of the global economy is recovering steadily.
Hitech Securities Director Sanjeev Bhambri said markets got corrected as technically they were in a overbought zone and the Nifty could come down by another 200 to 250 points.
Brokers said the market discounted firm European stocks, which had triggered a partial intra-day recovery but selling got momentum in the last 30 minutes of trade with investors unloading outstanding positions in the Futures & Options.
Weak trend in Asia added to the selling pressure. Japan’s Nikkie lost 0.70 per cent, China’s Shanghai index 1.89 per cent and Hong Kong’s Heng Seng fell by 0.49 per cent.
News that the World Bank has approved four Indian projects worth Rs USD 4.3 billion also did not cheer investors.