Heavy selling in infrastructure scrips and Anil Ambani group companies amid persisting concerns over high interest rates, widening probe in the 2G spectrum scam and weak Asian trends pulled the Bombay Stock Exchange sensitive index, Sensex by 183 points to 17592.77 on Wednesday against 17775.70 on Tuesday. On Tuesday, the benchmark index dropped by 261 points.
Marketmen said a Credit Suisse report projection that India's economic growth may dip to 7.7 per cent in 2011-12 from the government estimates of 8.6 per cent this fiscal raised investor fears that high inflation and rising interest rates could hit corporate earnings hard.
ADAG group company Reliance Infra was the worst sufferer from the Sensex pack, with a fall of 18.79 per cent to Rs. 534.70. Besides, Reliance Communications logged an all-time low with a slide of 14.32 per cent to Rs. 94.85. Other counters such as Rel Mediaworks dipped by 16.1 per cent to Rs. 129.10, Reliance Capital by 14.05 per cent to Rs. 412.90 and Reliance Power by 8.93 per cent to Rs. 113.15
Power, metal, realty, consumer durables and capital goods segments were hit the most.
Similarly, the NSE 50-share Nifty dropped further by 59 points to 5253.55 from 5312.55.
Marketmen said selling pressure also gathered momentum in view of CBI's arrest of DB Realty official in the widening probe in the 2G spectrum licensing scam. They said, overall, wary retail investors continued with selling spree for the second straight day in second-line counters on the back of increased selling by foreign funds.
Foreign institutional investors sold shares worth Rs. 726.54 crore on Tuesday as per provisional data.
Reflecting heavy sell-off in the second-line stocks, BSE-Smallcap and BSE-Midcap fell 4.30 per cent and 3.64 per cent respectively.
On the global front, Asian stocks ended lower on worries about further policy tightening from China after its central bank lifted interest rates late on Monday by 25 basis points to contain inflation.
The key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan ended lower between 0.17 per cent and 1.36 per cent. However, European markets were trading narrowly mixed in afternoon trade. Overall, 22 of the 30 Sensex-based counters ended with losses, while others closed with gains.
M&M was the top gainer with a rise of 4.06 per cent to Rs. 654.20 on excellent third quarter results. Among sectoral indices, BSE-Power plunged by 4.23 per cent, BSE-Metal by 3.87 per cent, BSE-Realty by 3.81 per cent and BSE-CD by 3.57 per cent.