Markets ended Tuesday's trading session at the intra-day low level led by selling pressure witnessed by the capital goods, IT and banking stocks. The Nifty plunged 128 points to provisionally close below the crucial psychological level of 5,000 at 4,986 and the Sensex slipped 395 points to provisionaly shut shop at 16,518.
(Updated at 3.20 PM)
After a volatile trading session for most part of the day benchmark share indices continue to trade near their day lows amid selling by foreign funds despite the government on Monday deferred the General Anti-Avoidance Rule (GAAR) by a year and also reduced long-term capital gains for private equity investors to 10% from 20%.
The Sensex was down 202 points at 16,710 after touching an intra-day low of 16,692 while the Nifty was down 63 points at 5,051 after touching a low of 5,047 around 1430 hours. The fag end of the session saw the 50-share index break the 5,000 mark for the second day in a row and touch 4,998 levels.
According to provisional data, Foreign Institutional Investors were net sellers in Indian equities to the tune of Rs 631 crore on Monday.
Asian markets were mixed with the Nikkei ending up 0.7% while the Shanghai Composite and Hang Seng ended marginally down. European shares opened lower as uncertainty over the implications of the Greek and French elections for Europe's efforts to resolve its debt crisis sent the euro and shares lower on Tuesday and supported safe-haven German government bonds.
Among the sectoral indices, the IT index was the top loser down 2.8% followed by Capital Goods Index down 2.2% and Auto Index slipped 1.5%.
Shares of software majors witnessed selling pressure after after Nasdaq-listed IT services company Cognizant Technology Solutions Corp revised its 2012 guidance downwards by nearly $200 million (around Rs 1,066 crore today), due to a slower than anticipated acceleration in demand. Among Sensex shares, TCS was down 5% at Rs 1,210 and Infosys slipped 1.7% at Rs 2,390.
Capital goods shares witnessed selling pressure on account of slowdown in order inflows. Engineering major Larsen & Toubro was down 2.2% while public sector company BHEL dropped 3.2% to Rs 220.
Among other shares, DLF was trading higher by 2.2% at Rs 194 in otherwise weak market on reports that the company is planning to sell around 51% stake in its life insurance joint venture - DLF Pramerica Life - to HCL Group for about Rs 500 crore.
Among the broader indices, the BSE Mid-cap was down 0.2% while the Small-cap index was trading flat.
However, the overall market breadth was positive with 1,330 gainers and 1,275 declines.