Sensex closes below 10,000

Weighed down by negative global cues, stock markets succumbed to incessant selling on Tuesday and the Sensex ended trade in four digits for the first time since February 17.

Continuing from where they left yesterday, the bears began hammering down stocks right from the start of Tuesday's trading session.

The Sensex opened with a big negative gap and plunged 330 points to a low of 9,885 within the first few minutes of trade.

Though it managed to recover to an intra-day high of 10,193, it could not sustain these levels and plunged 256 points to close at 9,957.32.

The NSE Nifty index, which had plummeted to a low of 2,910 in opening trade, settled at 2,937.30, recording a loss of 79 points.

The Sensex, which breached the closing level of 10,000 for the first time on February 7, last closed below this level on February 17.

Concerns over higher interest rates, rising inflation, hike in fuel prices and continued weakness in global markets contributed to the sense of gloom on the Indian bourses. With no positive cues to latch on, investors were not inclined to build up positions in early trades.

The market breadth continued to be negative. At NSE, only 69 stocks advanced, as against 841 declining. BSE reported an advance of 338 scrips even as 2,091 declined.

The negative breadth, added to thin volumes, has left analysts concerned about the possibility of an early recovery in the markets. NSE reported a turnover of Rs 6,639.59 crore and at BSE the total turnover amounted to Rs 3,010.43 crore.

The market remained deep down in the red throughout the day as frontline stocks continued to struggle for support. After it appeared that the market would slide sharply to lower levels, a ray of hope emerged when buying resumed on a few blue-chip counters ,with bargain hunters entering the fray.

As select blue-chip stocks, led by banking major State Bank of India, bounced back a little past mid-afternoon, it seemed that the market would recover its losses and emerge into positive territory again.

However, fresh selling that erupted during the end of the session took a heavy toll on frontline stocks and pushed the market down to a highly negative close.

Prakash Rajdev of Khandwala Securities said, "The continuous fall clearly shows the lack of confidence in the market. The redemption pressure on the mutual funds' side also hit the market hard. Even the domestic financial institutions and mutual funds are not supporting the market."

Experts were bearish on the near-term outlook as the overall market sentiment has turned weak among all investors. "Given the weak market conditions and kind of panic selling witnessed in the recent past, the market will take time to recover," felt Rajdev.