The S&P BSE Sensex and the CNX Nifty lost over 3% each at 15:01 IST weighed by weak global stocks, rupee hitting record low against the dollar and concerns that passage of food security bill will weigh on country's fiscal and current account deficit.
At 15:01 IST, the S&P BSE Sensex was down 608.43 points or 3.28% to 17,949.70. The index tumbled 636.31 points at the day's low of 17,925.11 in mid-afternoon trade, its lowest level since 22 August 2013. The index declined 97.41 points at the day's high of 18,460.72 in early trade.
The CNX Nifty was down 194.10 points or 3.54% to 5,282.40. The index hit a low of 5,274.25 in intraday trade, its lowest level since 22 August 2013. The index hit a high of 5,427.40 in intraday trade.
The S&P BSE Sensex slipped below the psychological 18,000 mark. The market breadth, indicating the overall health of the market, was weak.
Among the 30-share Sensex pack, 24 stocks fell and rest of them rose. HDFC Bank (down 8.2%), NTPC (down 5.82%) and L&T (down 5.23%) were the key Sensex losers.
Bhel dropped 8.32%, with the stock sliding on profit booking after gaining 21.97% in prior four sessions.
HDFC lost 8.16%, with the stock extending intraday losses.
Global stocks fell on Tuesday after US Secretary of State John Kerry said the US President will hold Syria's government accountable for using chemical weapons against Syrian civilians.
The market sentiment was also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Monday, 26 August 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 607.43 crore on Monday, 26 August 2013, as per provisional data from the stock exchanges.
Meanwhile, the rupee trimmed losses after weakening past 66 against the dollar to hit record low today, 27 August 2013. The partially convertible rupee was trading at 65.71 per dollar, sharply lower than its close of 64.30 on Monday, 26 August 2013. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
Lok Sabha on Monday passed the Food Security Bill after considering all the amendments, with the Opposition saying they will support the bill even though it is half-baked. The bill seeks to provide cheap foodgrains to 82 crore people in the country, ushering in the biggest programme in the world, to fight hunger. The ambitious bill was adopted by the House through a voice vote after a nine-hour combined discussion on the measure and a statutory resolution seeking to disapprove the ordinance promulgated on 5 July. Over 300 amendments moved by the opposition were rejected. The bill proposes subsidised foodgrain for up to 75% of the rural and up to 50% of the urban population. It proposes meal entitlement to specific groups. Eligible households would get five kg of foodgrain per person every month at Rs 3 per kilo of rice, Rs 2 per kilo of wheat and Rs 1 per kilo of coarse grains. It still needs to be passed by the upper house, the Rajya Sabha, to become law.
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