New Delhi - Indian equities dropped about 5 per cent soon after opening Tuesday, largely because investors were selling stocks to lock in profits from previous gains, given the gloomy global economic outlook and negative trading on other Asian markets, analysts said. The 30-share Sensitive Index of the Bombay Stock Exchange traded at 10,006.1 shortly after noon (0700 GMT), 5.03 per cent below Tuesday's close.
The broader 50-share Nifty of the National Stock Exchange was down 4.92 per cent at 2993.25.
The Indian indices had gained more than 8 per cent during the past two trading days, and Tuesday's losses were registered by the same counters that had seen the largest gains - metals, banking, and oil and gas.
Market sentiment turned negative by the latest export figures released by the government Monday evening. According to preliminary estimates by the Department of Commerce, merchandise exports dipped 15 per cent in October compared with the same month in 2007.
The department said it did not expect marked improvement in the coming months. The decline was the first in five years for Indian exports.
Reduction of demand in the United States and Europe, pricing pressure, and problems of credit and credibility would continue to plague exporters in the months to come, said RS Gujral, director general of foreign trade.
Meanwhile, Prime Minister Manmohan Singh said his government would do everything within its power to help Indian business weather the global financial crisis, the PTI news agency reported.
Speaking to reporters on his way back to India from a trip to western Asia, Singh said: "Whatever industry wants, we will take a fresh look at it. We will do whatever is needed to keep the economy sound."
