The Sensex and Nifty fell to their lowest in nearly four months on Friday, led by drug makers, after Bloomberg reported that US prosecutors could file charges by year-end in a criminal investigation of generic makers over suspected price collusion.
Indian drug makers, most of which count the United States as their biggest export market, were the top losers on the key indexes on Friday.
There were steep declines in the shares of global generic drug makers on Thursday after the report, which also said that high-level executives were likely to be charged in an ongoing investogation by the US Department of Justice.
The investigation has been going on for at least two years, and several companies, including Sun Pharmaceutical Industries Ltd and Dr Reddy's Laboratories Ltd, have disclosed it earlier.
On Friday, a Sun Pharma spokesman said the company continues to cooperate with the DoJ, and has no other detais to offer at the moment. A spokesman for Dr Reddy's declined comment.
Sun Pharma, the world's fifth-largest generic drugs manufacturer, fell as much as 7.2 per cent, while Dr. Reddy's lost as much as 5.5 per cent.
The Nifty pharmaceuticals index fell as much as 4.8 per cent.
The broader NSE index ended lower by 51.2 points or 0.6 per cent at 8,433.75 and the benchmark BSE index closed down by 156.13 points or 0.57 per cent at 27,274.15.
Barring FMCG, IT and TECk, all other BSE sectoral indices ended in the red. Among them, healthcare index plunged the most by 4.16 per cent, realty 2.44 per cent, metal 2.41 per cent and capital goods 1.72 per cent. On the other hand, FMCG index was up 1.41 per cent, IT 0.66 per cent and TECk 0.31 per cent.
Top five Sensex gainers were ITC (+3.64%), M&M (+1.02%), Wipro (+0.91%), HUL (+0.91%) and ONGC (+0.78%), while the major losers were Sun Pharma (-7.41%), Dr Reddy's (-5.67%), Lupin (-3.57%), Coal India (-3.44%) and Hero MotoCorp (-2.86%).
Brokers said domestic sentiment also remained weak as participants indulged in cutting their bets, tracking a falling trend in global market as investors fret over next week’s US president election.
Global markets
Asian shares slipped on Friday and the dollar nursed losses in a week marked by growing uncertainty about the outcome of the US presidential election.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.4 percent after brushing its lowest levels since early August. It looked set for a loss of 1.6 for the week.