** India’s NSE index falls more than 2 pct, marking it biggest single day fall in more than two weeks and erasing more half the gains seen since the Sept 7 lows

** FIIs net sellers in the previous session if adjusted for a block deal in L&T Finance in which Citi bought – Reuters Calculations

** FIIs are headed towards their fourth month of sales in Indian stocks in five NSDL data shows

** Fund managers, institutional dealers cite redemption pressures in marquee names such as HDFC, TCS, Infosys and ICICI Bank

** India still trades at heavy valuation premium to rivals as relatively healthier macro picture pushes GEM/Asia-focused funds into country’s equities

** Continued bleeding in EM funds, where India still remains the biggest “overweight” position by far, combined with a weakening rupee and rich valuations relative to earnings growth has meant offshore investors are on the retreat

** EM equity funds suffered an 11th straight week of outflows in the week ending Sept 9, with a total of $38 bln leaving over that period, brokers said, citing EPFR data

** Also, DII war chest isn’t enough to counter FII selldown

** Macquarie, Barclays, Deutsche Bank and Ambit had slashed India’s targets earlier citing delay in earnings recovery

Capital market regulator, Securities and Exchange Board of India (Sebi), has levied a fine of Rs 7,269.5 crore on Pearl Agrotech Corp (PACL) and its four directors  for running an illicit money pooling scheme worth Rs 50,000 crore.

The penalty follows a Securities Appellate Tribunal (SAT) order last month that upheld Sebi’s investigations and told PACL to close operation within three months from the date of the SAT order.

On Tuesday, Sebi’s adjudicating officer Amit Pradhan said the penalty is three times the profit accrued and commensurate with the default committed by the company and its directors. “It will give a strong message to securities market at large that such types of violations will not be viewed lightly,” Pradhan stated in a 42-page order, effective immediately.

In August 2014, Sebi found PACL guilty of violating collective investment scheme (CIS) norms by raising money without registering with the regulator.

Sebi had directed the company to refund close to Rs 30,000 crore raised from some 58.5 million customers through the CIS.

The money was collected by the Nirmal Singh Bhangoo-managed group through its two companies — Pearls Agrotech Corporation (PACL) and Pearls Golden Forest (PGFL), in Ponzi schemes under the garb of sale and development of agricultural land.

The amount concerned is twice that collected by the Sahara Group, which is said to have mobilised Rs 24,000 crore.

In April this year, the Supreme Court ordered Pearl Group companies to liquidate assets and repay investors spread across Punjab, Haryana, Rajasthan, and Delhi. The apex court ordered the company to liquidate property, cash deposits and other assets to repay investors.

Motherson Sumi declined an additional 8% following reports that the emission-fixing scandal that has engulfed Volkswagen in the US could extend to other companies and countries.

Motherson Sumi ended near its 52-week low on Tuesday, losing nearly Rs 5,600 crore in stock-market value since close on Friday. More than 2.21 crore shares exchanged hands on the BSE and NSE, seven times the 30-day average daily volume.

The US government confirmed on Monday it had initiated a probe into the scandal and South Korea on Tuesday said it would investigate emissions of VW Jetta and Gold models and Audi A3 cars produced in 2014 and 2015. The probe could extend to all other German diesel imports if problems are discovered, said the South Korean environment ministry.

Auto analysts quoting various international reports said there are many examples of carmakers using defective devices and later on forced to recall vehicles.

The scandal could also spread to petrol cars and Co2 levels. According to Prabhudas Lilladher, the scandal, and the subsequent recalls, pose a potential threat to the prospects for MSS — if the fallout extends beyond North America.

“The current development should not be seen as anything different from a vehicle recall that other car manufacturers have carried out over the years. If VW’s global market share goes down because of this development, it is possible that MSS may not be impacted as some other OEM, which takes up the slack, is also a MSS customer. However, with its strong order pipeline, continued debt reduction and improvement in subsidiary profitability, the long-term outlook for MSS remains bright,” said Rohan Korde, analyst, Prabhudas Lilladher.

Motherson Sumi chairman Vivek Chaand Sehgal in a television interview termed the market development as ‘over-reaction’ and allayed concerns over its exposure to leading Indian carmaker, Maruti Suzuki. Sehgal said Motherson has limited exposure to Volkswagen’s diesel vehicles and that the German carmaker was strong enough to withstand the financial impact of the development.

“We are not making the parts that go in to the engine. Our parts are mostly the interior parts like modules and plastics. As far as our exposure to Volkswagen in US is concerned, it is very less…We are being quizzed for someone else’s fault,” Motherson Sumi Systems chief financial officer GN Gauba said.

The US allegations involve a series of diesel cars produced by VW and the brands it owns, such as Audi. These include the Audi A3, VW Jetta, Beetle, Golf and Passat models. VW has halted sales of these models.

Volkswagen AG shares fell nearly 20% to 107.22 euros in Frankfurt on Tuesday, after seeing a similar decline on Monday.  Shares of Renault, Volkswagen’s French rival, also dropped by 4%, while Peugeot was down 2.5%, Nissan 2.5% and BMW 1.5% amid concerns they could be caught up in investigations, data showed.

Analysts said Volkswagen faces not only a short-term drop in sales and a hit to its reputation but also the longer-term risk of litigation in the US. The violations, which affect nearly half a million vehicles, could result in as much as $18 billion in fines, based on the cost per violation and the number of cars. Criminal prosecution is also possible, they said.

The Wolfsburg-based German company admitted to fitting its US diesel vehicles with software that turns on full pollution controls only when the car is undergoing official emissions testing, the Environmental Protection Agency said Friday.

A sharp sell-off in the stock market wiped out over Rs 1 lakh crore from total investor wealth today as the benchmark BSE Sensex lost 541 points.

Fag-end massive selling pulled down the Sensex by 541.14 points or 2.07 per cent to 25,651.84.

The market capitalisation (m-cap) of BSE-listed companies fell by Rs 1.36 lakh crore to Rs 93.33 lakh crore.

“Indices slipped in deep red in line with European peers, China worries, profit-booking and unwinding of positions ahead of September derivative contracts expiry,” said Gaurav Jain Director, Hem Securities.

The Asian Development Bank (ADB) today lowered growth projections for India for the current fiscal to 7.4 per cent, from the 7.8 per cent earlier, citing weak monsoon, poor external demand and inability of the government to push economic reforms in Parliament.

Among the 30-Sensex components, 26 ended the day with losses led by Vedanta, Hindalco Industries, Coal India and Tata Motors.

The gainers were Wipro, Mahindra & Mahindra, Sun Pharma and Infosys.

Among BSE sectoral indices, metal fell by 4.24 per cent followed by capital goods (3.10 per cent), power (3.09 per cent), bankex (3.04 per cent) and realty (2.54 per cent).

The BSE Sensex wiped off its initial gains in the second half of the trading session on Tuesday and closed 541 points down at 25,652. Nifty closed 165 points down at 7812. (Photo: PTI)

The BSE Sensex wiped off its initial gains in the second half of the trading session on Tuesday and closed 541 points down at 25,652. Nifty closed 165 points down at 7812.

Here are few reason why domestic equity markets plunged today:

1. Weak European Markets: Sentiments dampened after European shares fell on Tuesday in early trade, led lower by miners as copper prices slid on worries over Chinese demand, while the dollar hit its highest in almost two weeks after Federal Reserve officials signalled US interest rates could still rise this year.

2. F&O Expiry: Offloading of bets by participants ahead of September expiry in the derivatives segment on Thursday queered the pitch.

3. Weak Rupee: Fresh weakness in the rupee, which depreciated around 15 paise to Rs 65.8450 (intra-session) against the dollar, dampened mood.

4. Selling pressure: Metal stocks witnessed selling pressure on Tuesday after London copper hits a two-week low after China increased copper imports in August but not enough to absorb a surplus while jitters persisted over its appetite for metals. As a result, the BSE Metal index slid 4.24 per cent on Tuesday. Share price of Vedanta and Hindalco declined 6.29 per cent and 6.22 per cent to Rs 92.35 and 73.15, respectively.