The benchmark Sensex, however, started the session on a positive note at 15,896.09 from its previous close of 15,832.55, but failed to remain in the positive zone and nosedived to a day's low at 15,303, wiping off 529.51 points. It finally ended with a loss of 3.09 per cent in late trade. Meanwhile, broader based Nifty was down 138.90 points at a low of 4,632.70 before closing with a negative gap of 2.61 per cent.
Marketmen attributed the heavy fall in Indian bourses to the sharp surge in inflation to a three-year high at 7 per cent in the week ended March 22. Banking stocks fell after speculative reports on possiblity that Reserve Bank of India might make an emergency intervention to rein in inflation.
Capital goods and power stocks declined. Bharat Heavy Electricals (Bhel) and HDFC were major losers. However, Ranbaxy Laboratories and Tata Steel were immune from the market fall. The market breadth was negative.
BSE Midcap and Smallcap index were down by nearly two per cent, underperforming the Sensex. BSE posted a turnover of Rs 4947 crore against Rs 4985.58 crore yesterday.
Index heavyweight Bharat Heavy Electricals was down 6.89 pc to Rs 1,634.10, Housing Development Finance corporation declined 6.83 pc to Rs 2,275.95, Mahindra&Mahindra fell 6 pc to Rs 605.15, Larsen&Toubro slid 5.74 pc to Rs 2,686 and Reliance Industries was down 2.96 pc to Rs 2,323.
Banking stocks plunged after inflation data came in. HDFC Bank was down 2.74 pc to Rs 1,290.05, ICICI Bank by 3.17 pc to Rs 762.90 and State Bank of India by 1.96 pc to Rs 1,607.
IT stocks, which gained good percentage in the previous session, declined. Wipro came down 4.5 pc, Infosys fell 2.55 pc, Tata Consultancy Services was down 1.78 pc and Satyam Computer Services came down 0.65 pc.
Meanwhile, the Bombay Stock Exchange (BSE) today launched the trading of Sensex-based futures on the US Futures Exchange (USFE) in Chicago. The contract will have a notional value of USD 40,000 and a tick value of USD 10. The clearing and settlement will take place through the clearing corporation, Chicago.