Dalal Street plunged by nearly 500 points to close at a two-month low after all-round selling triggered by a steep fall in heavyweight RIL and weak global markets. The BSE Sensex lost 491 points or 3.09 per cent to close at 15,404.94. The S&P CNX Nifty slipped 147.80 points or 3.14 per cent to 4,563.90, its lowest closing since August 21, 2009.

Leading the sell-off, Reliance Industries, which has the maximum weight on the Sensex, plunged 5.73 per cent to Rs 1,820.65, following reports that the Comptroller and Auditor General would soon audit the company’s books of accounts to examine the expenses incurred in the KG basin. RIL’s market cap fell Rs 18,000 crore to Rs 299,154 crore.

“The market managed to hold near the closing levels of the last trading session for about two hours when selling emerged. There was sustained selling pressure. The downtrend is likely to continue for some more time. Traders should be alert about a technical bounce back,” said Bonanza Portfolio assistant vice-president Avinash Gupta. With this, the Sensex has fallen 1,922 points from 17,326 since Diwali this year.

“The whole scenario changed in the second part of the day with the opening of European markets. Another reason for such a massive selloff was the Markit Purchasing Managers’ Index which fell to 54.5 in October from 55 in September,” said Geojit BNP Paribas research head Alex Mathews.

According to dealers, weakness in European markets and US index futures weighed on investor sentiment. Risk aversion rose after the UK Treasury announced a shake-up of British banks, which raised concerns about its financial system. Royal Bank of Scotland and Lloyds Banking Group will receive £31.3 billion in a second bailout from the UK taxpayer in return for putting a cap on bonuses.

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