Benchmark share indices ended nearly 2% down on Wednesday after the rupee fell to an all-time low while the political uncertainty in Greece also dampened investor sentiment.
The Sensex provisionally ended down 296 points or 1.8% at 16,032 and the Nifty ended down 83 points or 1.7% at 4,859.
(Updated at 14:34 hrs)
Markets continue to reel under selling pressure in late noon deals, weighed down by weak global cues and rupee hitting all time low. Financials, metal and auto shares are also leading the downslide.
The Sensex which touched an intra-day low of 15,975 has declined 282 points at 16,047 while the Nifty which touched an intra-day low of 4,837 has plunged 84 points at 4,859.
The rupee tumbled 67 paise to all-time low of Rs 54.46 against the US dollar on the forex market during the mid-session today on increased capital outflows and strong demand from importers.
Traders said the Reserve Bank's efforts to curb the falling rupee have failed to arrest the decline and it has surpassed the previous low of Rs 54.32 set on December 15.
On the global front, the Nikkei share average slid 1% on Wednesday, as data showing flat bank lending in China chilled already tepid sentiment for risk assets although the benchmark managed to end a whisker above a key support level.
The Nikkei has fallen 14% since hitting a one-year peak of 10,255.15 on March 27 as a deepening sovereign debt crisis in Europe and worries about slower growth have boosted the 'safe-haven' yen.
European markets too are under pressure with CAC, DAX and FTSE declining by nearly 1% each.
Back home, all the sectoral indices are trading in weak zone. BSE Auto, Consumer Durable and Metal indices have plummeted by nearly 3% each followed by counters like Banks, Capital Goods, Power and Realty, all dipping by 2% each.
Tata Motors is the top Sensex loser, down over 7% after the company said its global sales remained flat in April at 87,377 units over the same period last year. India's largest automobile company had sold 87,114 units in April 2011. Maruti Suzuki, Bajaj Auto and Hero Moto have declined between 1-3%.
Shares of metal companies are under pressure on the bourses after the LMEX, a gauge of six metals traded on the London Metal Exchange (LME), has closed at 3,338.90 its lowest level since January on Greece woes.
“LMEX fell to a 4-month low, extending losses to a fourth consecutive session, as investors continued to shy away from risky assets with the Greek political malaise threatening to plunge Europe into a deeper financial mess,” the Reuters report suggests.
Among the individual stocks, Hindalco hit two-and-half year low, is down 4% at Rs 110 on the BSE. JSW Steel, SAIL, Tata Steel and NMDC too, are town by 4% each, followed by Jindal Steel and Power, Hindustan Zinc and Coal India are down 2-3%.
From the banking and financial space, HDFC, ICICI Bank and SBI have fallen between 2-4%.
Other notable losers include BHEL, DLF, Wipro, Infosys, Tata Power, ITC and L&T.
Meanwhile, Meanwhile, BSE Midcap index has plunged by 0.74% whereas BSE Smallcap index is down 1.20%.
The market breadth in BSE remains unhealthy with 1,775 shares declining and 813 shares advancing.