The Bombay Stock Exchange sensitive index, Sensex, tanked 337 points on Monday, mirroring sharp decline in world markets that were shaken by fears of widening financial crisis in Europe and fragile economic recovery in the US, besides a rush of public offers at home. The Sensex closed lower at 16781.07 against 17117.69 last Friday.
Analysts had on Friday forecast a plunge in the market following the government's decision to make 25 per cent public holding in listed companies mandatory, which would result in a flood of public offers that would lead to stock price correction.
The markets did open down, but on negative global cues remained weak for the entire session. During the day, the bellwether sank 431 points to hit a low of 16686.73. Twenty-seven of the 30 share barometer index ended in the red.
The wide-based 50-share Nifty of the National Stock Exchange too finished lower at 5034 against 5135.50.
Trading was mainly influenced by reports that Hungary too could be staring at a Greece like debt-default situation. Besides, Portugal, Italy, Ireland and Spain are also facing financial pressures.
Reliance Industries, which has the maximum weight on the benchmark index, lost 2.08 per cent to Rs. 1,009.35. Widespread selling was witnessed across sectors, with metal, realty, PSU and oil & gas leading the decline. All the sectoral indices on the BSE ended in the red, falling in the 1-4 per cent range. BSE PSU index lost 1.95 per cent on government's mandatory norm for a minimum 25 per cent public holding.
Reliance Communications, however, bucked the broader market trend and rose 4.61 per cent to Rs. 175.90 after the company's board gave its ‘in-principle' approval for a 26 per cent strategic stake sale.
RCom shares have been rising sharply in the past few sessions amid stake sale reports.
The scrip has gained about 30 per cent since June 1. ACC and Hero Honda were the two other scrips in the Sensex which managed to end in the green.
Metal stocks saw a meltdown, with Hindalco dropping by 5 per cent to Rs. 140.35, Tata Steel by 4.59 per cent to Rs. 462.55, Sterlite Industries by 4.24 per cent to Rs. 621.20 and Jindal Steel by 2.62 per cent to Rs. 614.10. IT stocks, which were up ahead of crucial economic data in the U.S. on Friday, retreated after jobs data failed to meet the Wall Street expectations. The U.S. is the biggest market for Indian software exporters. Infosys lost 2.14 per cent, TCS 1.61 per cent and Wipro 0.40 per cent. Realty major DLF tripped on selling pressure and was the biggest loser in the BSE-30. The scrip lost 6.19 per cent to Rs. 264.25.