Indian stocks tumbled, with the benchmark index falling to its lowest level this year, after block deals in index futures and foreign funds extended the longest selloff in local shares this year.

Bharat Heavy Electricals Ltd., the top power-equipment maker, was the biggest loser on the S&P BSE Sensex, while NTPC Ltd., the largest utility, fell the most in eight weeks. ICICI Bank Ltd. slid to a three-month low, sending a gauge of lenders its sharpest loss since April 27. The yield on sovereign bonds due 2024 climbed to a four-month high and the rupee weakened.

The Sensex plunged 2.6 percent to 26,717.37, the lowest close since Dec. 17. The gauge briefly extended losses to more than 10 percent from its Jan. 29 record, meeting the definition of correction, as more investors seek more evidence that the government’s efforts to bolster growth will lead to a revival in company profits. Foreigners sold $475 million of shares on Thursday and Monday, and have been sellers of CNX Nifty futures since April 23.

And:

The Sensex has dropped 2.8 percent this year and trades at 14.8 times projected 12-month earnings, the cheapest since December. The MSCI Emerging Markets Index is valued at 12.5 times, data compiled by Bloomberg show.

David Fuller's view

Markets are volatile and this remains a lengthy consolidation of earlier strong gains for India.  That is a normal process which allows valuations for this fast-growing market to catch up.

Charts for India are in the previous section above.