Wiping off initial gains, the BSE benchmark Sensex on Wednesday dipped below 18,000 level after a gap of nearly one year and closed with a 340-point loss in step with the rupee hitting a new low amid rising fears that US Fed will rollback its economic stimulus soon.

Investors lost another Rs 1 lakh crore in Wednesday’s trade after markets started tumbling after noon.

Enthused by RBI’s overnight measures to ease liquidity situation, the Sensex had begun the day on a positive note and jumped over 321 points to 18,567.70.

However, as rupee started its southward journey, stocks fell. Led by losses in metal, oil&gas, FMCG and heathcare stocks, Sensex plunged by 340.13, or 1.85 per cent, to 17,905.91 — a level last seen on September 11, 2012.

The Sensex has now lost over 1461.13 points in 4 days.

On similar lines, the broad-based National Stock Exchange index, Nifty, dropped by 98.90 points, or 1.83 per cent to 5,302.55 as companies having exposure to overseas markets such as IT and pharma suffered losses.

Also, SX40 index, the flagship index of MCX-SX closed at 10,618.44, down 211.32 points or 1.95 per cent.

As the market remained in bear-grip, 25 of Sensex stocks closed with losses. IT shares led by Infosys, TCS and Wipro were among losers on profit-booking after recent gains.

Brokers said market sentiment dampened as government efforts failed to revive the free-fall in rupee which went past 64.5 in intra-day trade on increased capital outflows.

They said world stock markets remaining choppy as traders waited for hints from the US central bank about when it might begin to reduce its massive stimulus effort in the soon-to-be-released minutes of its July meeting.

Overseas funds sold a net USD 105 million of local shares in the previous session, the most since July 12, paring this year’s inflow to USD 12.4 billion.

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