Sensex sees fourth-biggest fall of the year

After a brief mid-session recovery, sluggish European stocks and sustained sell-off by foreign funds today dragged the market down, with the benchmark Sensex plunging 435 points, registering the fourth biggest single-day fall of the year.

The bellwether index fell 749.05 points on January 7, 480.35 points on March 30 and 437.63 points on June 8 this year.

After a high level of volatility, the Bombay Stock Exchange 30-share barometer settled the day at a two-week low of 14,522.84, netting a fall of 435.07 points or 2.91 per cent from its previous close.

The Sensex touched the intra-day low of 14,447.02. The market spiralled downwards in afternoon trade as European stocks extended losses to a fourth day after a sharp fall in the American market yesterday.

The dramatic selling pressure surfaced after a leading brokerage, Kotak Securities, reportedly lowered RIL's rating.

SMC Capitals Equity head Jagannadham Thuguntla said: "The market is showing signs of fatigue because of valuation concerns; besides, there is apprehension that the Budget may not have that many sweeteners."

Market sentiment was also adversely affected by sustained pullout by foreign institutional investors (FIIs), which were believed to be aggressive sellers during the day.