The 30-share Sensex on the Bombay Stock Exchange lost 499.92 points at 12,961.68, a level last seen on February 28, 2007. The index touched the day's low of 12,904.09 and a high of 13,613.82 points, reflecting volatility in trade. Similarly, the wider Nifty on the National Stock Exchange dropped 143.80 points at 3,896.75. The index, which had broke 4,000 level at early trade, cracked another resistance level of 3,900 on panic selling.
In last three straight sessions, the Sensex had lost over 1,460 points as investors resorted to hectic selling on worries of political uncertainty, inflation and high oil prices.
"Stock markets are have been badly hit the ongoing tussle between the ruling party and its key allies over the nuclear deal amid crude oil surging to records," said an NSE broker Rajiv Malik. Besides, fears of inflation rising further also haunt the bourses, he added.
Marketmen said hike in interest rate by leading bankers has pulled down bank stocks and scrips of other interest sensitive sectors like realty, auto and consumer durables.
"Weakening trend received another blow after European and Asian stock markets remained weak," said a BSE broker Ratnesh Gupta.
The markets received another shock from metal stocks after the base-metal prices tumbled in the London metal exchange. Metal sector index suffered the most by 713.11 points at 12,494.19 followed by capital goods index by 336.38 points at 9744.31.