The Sensex and the Nifty ended down by nearly 1 per cent, recording their lowest close in over a year on global risk aversion stoked by weak manufacturing data from China, the United States and Europe.

The 30-share BSE index Sensex plunged 242.88 points or 0.95 per cent to 25,453.56 and the 50-share NSE index fell 68.85 points or 0.88 per cent to 7,717.

Among BSE sectoral indices, power index fell the most by 2.43 per cent, followed by PSU 2.37 per cent, banking 1.81 per cent and capital goods 1.69 per cent. On the other hand, IT index was up 1.24 per cent, followed by TECk 0.97 per cent, realty 0.69 per cent and FMCG 0.34 per cent.

Top five Sensex gainers were TCS (+2.45%), Tata Steel (+1.6%), ITC (+1.41%), Reliance (+1.09%) and Infosys (+0.98%), while the major losers were BHEL (-5.1%), M&M (-3.56%), ONGC (-3.55%), SBIN (-3.55%) and Coal India (-3.07%).

Early trade

The Nifty opened 71 points up at 7,857, while the Sensex opened 106 points up at 25,892 after the Centre decided to accept the Shah committee report which recommended among other things, no levy of minimum alternate tax (MAT) on FIIs.

Broker's comment

"You will not see any magical recovery, but at least we will stabilise because what MAT will do is that sell side figure from FIIs will get subdued if it doesn't stop," Gaurang Shah, vice president at Geojit BNP Paribas, said.

Foreign institutional investors sold a record net Rs 16,87,700 crore ($2.55 billion) in Indian shares in August, more than the previous monthly record of Rs 15,34,700 crore in October 2008, according to regulatory data.

Global markets

European shares enjoyed some respite from a rough start to the week on Wednesday, rising 0.6 per cent, with traders pointing to more intervention in China to calm jittery markets and upcoming central-bank policy meetings.

The pan-European FTSEurofirst 300 index was up 0.6 per cent, with major indexes in London, Paris and Frankfurt broadly in line.

Weak Asian cues on China's economic health concerns and subdued domestic macro fundamentals with slower GDP growth for the June quarter and weak manufacturing PMI dampened the domestic sentiment.

A report by SMC Investments and Advsiors said: "The Indian Government has accepted the recommendation of the AP Shah committee not to pursue cases against foreign institutional investors (FII) involving minimum alternate tax (MAT) levied prior to April 1, 2015. Most of the Asian markets dropped early today following big drops in the US market and persistent concerns about the strength of China's economy. US Stocks plunged again Tuesday, continuing a rocky ride for Wall Street, after an economic report out of China rekindled fears that the world's second-largest economy is slowing more than previously anticipated.''

Asian shares fell for a third straight day on Wednesday as weak manufacturing reports from China, the United States and Europe fuelled worries about slowing global growth, while the safe-haven Japanese yen firmed as investors unwound carry trades.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.2 per cent by late morning, taking its losses to nearly 4 per cent so far this week as investors continued to dump emerging market assets.

Turmoil returned to Wall Street on Tuesday after a brief rest, with renewed concerns about China's economy pushing major indexes down almost 3 per cent and intensifying fears of a long-term selloff.

The Dow Jones industrial average fell 2.84 per cent to end at 16,058.35 while the S&P 500 lost 2.96 per cent to 1,913.85 points. The Nasdaq Composite dropped 2.94 per cent to 4,636.11.

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