Benchmark share indices ended nearly 2% down on Wednesday, amid weak global cues, after the rupee fell to an all-time low and the political uncertainty in Greece dampened investor sentiment.
The 30-share Sensex ended at 16,030 down 298 points or 1.83% and the 50-share Nifty ended at 4,858 down by 85 points or 1.7%. The Sensex and the Nifty reached an intra-day low of 15,975 levels and 4,837 mark, respectively. Sensex dipped below the psychological 16,000 level for the first time since January, 2012.
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.
Fears of a Greek exit from the euro zone worsening the debt crisis facing other European nations gripped financial markets on Wednesday, sending shares and other riskier assets lower as investors shifted funds into safe havens like the US dollar.
The euro touched a fresh four-month low of $1.2883, Spanish and Italian bond yields rose, while the FTSE Eurofirst index of top European shares hit its lowest level for the year at 983.95 points, down over 1%.
Back home, all the sectoral indices ended in negative zone. BSE Auto and Metal indices plummeted by nearly 3% each followed by counters like Consumer Durable, Banks, Capital Goods, Power and PSU, all dipping by 2% each.
Tata Motors was the top Sensex loser, down over 7% at Rs 269 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 declined by almost 2%.
Shares of metal companies were under pressure on the bourses after the LMEX, a gauge of six metals traded on the London Metal Exchange (LME), 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, was down 3%. JSW Steel, SAIL, Tata Steel and NMDC ended down between 3-4%, followed by Jindal Steel and Power, Hindustan Zinc and Coal India, down 2-3%.
Banking and financial space also faced the brunt of selling pressure. HDFC, ICICI Bank and SBI fell between 2-4%. HDFC dropped by almost 4%. According to report, the weighting of India’s biggest mortgage lender gets reduced in the MSCI indexes after its annual review.
Capital goods shares were also among the top losers with majors such as BHEL ending down 3.74% and L&T ended 1.38% lower at Rs 1,206.
Technology majors Infosys and Wipro lost 1-3%. In the realty segment, DLF dropped by 3%.
Meanwhile, Meanwhile, BSE Midcap index plunged by 0.78% whereas BSE Smallcap index closed down 1.11%.
The market breadth in BSE ended unhealthy with 1,733 shares declining and 983 shares advancing.
Aditya Birla Nuvo dipped over 6% at Rs 756 on reporting 42% year-on-year (y-o-y) in net profit at Rs 170 crore in the March quarter, due to a rise in depreciation and interest costs relating to its 3G investments in the telecom business.
Pantaloon Retail India slipped 4%, extending its previous day’s 2.5% fall on reporting a 76% year-on-year (y-o-y) decline in net profit at Rs 12.03 crore for the third quarter ended March owing to high interest costs and low consumer sentiment. Net sales however, grew 8% at Rs 3,026 crore on y-o-y basis.
Prime Focus gained over 4%, after high net worth investor Rakesh Jhunjhunwala raised his stake by acquiring additional more than 1% stake through open market transactions on Tuesday.