Mumbai, Feb. 7: The sensex plunged over 600 points today after foreign institutional investors and hedge funds dumped stocks, apparently losing confidence in India after the CSO moderated growth forecasts for the year.

After a few hours of normal trade during the first half of the day, the 30-share bellwether index started stumbling at around 1:30 pm — soon after the growth forecast came out. At close, the sensex had tumbled 612.56 points to 17526.93. The 50-share Nifty also dipped by 189.30 points and closed at 5133.25.

The fall in Indian equities was sharper than other Asian markets, which mostly closed with marginal losses. The sensex has tumbled over 1100 points in two days.

“The FIIs are not really in buying mode at this moment. The high net worth individuals and the institutional investors, both domestic and foreign, who bought last month when the stocks were trading at their lowest levels, have sold at a 15 to 20 per cent profit today,” said Ambaresh Baliga of Karvy Stock Broking

“Some large hedge funds have also opted for basket selling today. Many investors are still sitting on cash and are reluctant to buy until the market stabilises. We believe that the market will continue to be volatile for some time,” he said.

The oil and gas segment and metals were the worst sectoral losers today with the indices falling over 4 per cent. Realty, technology and PSU stocks were also clobbered, losing about 3.6 per cent each. The FIIs have been sellers to the extent of Rs 1,390 crore in the last two days. “The fall indicates there is no depth in the market. We do not really have any liquidity issues right now, but no one is buying stocks,” said V. K. Sharma of Anagram.

The Asian markets, although ending in the negative, appeared stable and recovered from yesterday’s losses. While the Nasdaq and the S&P yesterday fell 1.33 per cent and 0.76 per cent, respectively, Japan’s Nikkei today closed with a 0.82 per cent gain.