The Bombay Stock Exchange sensitive index, Sensex, fell for the third day in a row on Friday, down 200 points to four-week low of 16162, as global sell-off in equities continued amid grim prospects of world economic growth on warnings of slow U.S. expansion and persistent eurozone debt troubles.
Besides, the falling rupee added to investor woes, especially those who have parked funds in imports-linked sectors. The rupee fell to 28-month low at 49.90 a dollar and was the worst performer among Asia's ten most-traded currencies, brokers said.
Metals, capital goods, auto, consumer durables, banking and refinery stocks were hit hard.
RIL, HDFC Bank, HDFC, L&T, Tata Motors, Infosys, Tata Steel and Hindalco contributed over 150 points to the Sensex fall.
After falling 704 points on Thursday, the worst single-day performance in 26 months, the 30-share BSE barometer opened weak and dipped to a low of 16052.47, losing 300 points on the back of weak Asian trend as U.S. markets plunged.
However, there was some buying by domestic funds at lower levels amid positive openings in European markets as G-20 group of countries said they would work together to resolve the debt problems.
The Sensex rebounded to a high of 16368.41, but fell again on late profit-booking to close at 16162.06, down 199.09 points or 1.22 per cent.
The broad-based NSE 50-share Nifty also declined by 55.90 points to 4867.75.
Globally, Dow Jones and Nasdaq plunged 3.51 per cent and 3.25 per cent respectively on Thursday. The U.S. Federal Reserve has given a gloomy view on the American economy. Besides, weak Chinese economic data and escalating debt crisis in the eurozone, especially Greece, sent global stocks crashing.
“We are in a tough global situation with the U.S. and Europe at the centre of the turbulence. Emerging markets such as India and China are better placed but cannot remain insulated from that mess,” said Amar Ambani, Head of Research, IIFL.
Foreign institutional investors (FIIs) dumped shares worth Rs.1,234.60 crore on Thursday as per SEBI data.
Asian markets extended Thursday's heavy losses, with key indices from China, Hong Kong, Singapore, South Korea and Taiwan ending lower between 0.41 per cent and 5.73 per cent. The Japanese market remained closed.
European stocks washed out early gains and were down in the afternoon. The CAC was down 0.99 per cent, the DAX (0.58 pc) and the FTSE (0.33 pc).
Back home, 19 of the 30 Sensex scrips closed in the red while others finished in the green. The top heavyweight Reliance Industries (RIL), after plunging 6.16 per cent on Thursday, declined further by 2 per cent to Rs.770.75. Among sectoral indices, BSE-Metal dropped by 2.28 per cent, Capital Goods by 1.84 per cent and Auto by 1.59 per cent.
The total market breadth on the BSE remained weak as 1,805 stocks closed with falls, while 986 ended with gains.
