Four reasons why BSE Sensex, Nifty fell over 2 per cent on Sept 1

The benchmark Bombay Stock Exchange (BSE) Sensex and National Stock Exchange (NSE) Nifty fell over 2 per cent on Tuesday.

Among the 30 scrips on Sensex, 29 ended in negative terrain. Sun Pharma was the only stock that ended 0.34 per cent higher. Axis Bank emerged as the top loser as the stocks fell 5.24 per cent to close at Rs 480.15 apiece. Other major losers were Hindalco (5.18 per cent), Tata Steel (3.93 per cent) and BHEL (3.91 per cent).

Here are the top factors that led to the fall today:

• Weak GDP data than expected:  Mirroring a subdued economic performance, GDP growth rate declined to 7 per cent in the first quarter (April-June period) and infrastructure output slowed to three-month low of 1.1 per cent in July. The decline in the economic growth in the first quarter was on account of subdued output of farm, manufacturing and utilities like power, gas and water supply.
• Fears of rate hike by Federal Reserve: Fears among the investors that the Federal Reserve may hike rates in September was another major reason to dampen the spirits of investors. "Fed Vice Chairman Stanley Fischer on Saturday said US inflation would likely rebound as pressure from the dollar fades, allowing the Fed to raise interest rates gradually," said a Reuters report.
• China's manufacturing growth: Activity in China's factory sector shrank at its fastest rate in at least three years in August as domestic and export orders tumbled, increasing investors' fears that the world's second-largest economy may be lurching toward a hard landing.
• Selling by FIIs: Foreign institutional investors sold a net Rs 16,877 crore ($2.55 billion) in shares in August. Analysts said the sales were largely a result of the overweight positions in India by foreign investors , who have been heavy buyers since 2012.