Mumbai (PTI): Metals and realty bore the brunt of a dramatic sell-off by foreign funds, sending the benchmark Sensex spiralling down by a huge 437.63 points, the third-biggest fall of the year.

Extremely weak trends in European markets and US futures weighed on the local bourses.

The Bombay Stock Exchange 30-share barometer settled the day at 14,665.92, down 437.63 points or 2.90 per cent from its previous close.

Investors resorted to across-the-board selling as foreign institutional investors began pulling out from equity in later afternoon trade.

Bonanza Portfolio Assistant Vice-President Avinash Gupta said: "Falling metal prices and China giving incentives for export of steel products induced profit-taking and it seems a correction is setting in. The market is expected to be range-bound with rises/falls between 4,250 and 4,500."

The equity markets witnessed a massive capital inflow of Rs 22,133 crore between May 1 and June 4 on optimism about speedy economic reforms in post-election political stability.

DIIs, which have been net sellers in the current month, stepped up their sales during the day.

European markets were down by about 1.2 per cent to 1.61 per cent in early trade while the Hang Seng fell by 2.28 per cent, Taiwan Weighted by 3.34 per cent and Straits Times by 2.97 per cent.