Worried over an early end to the US stimulus, the BSE Sensex fell around 300 points on Wednesday, 3 July '2013 , erasing its gains for the year, while the Nifty was down around 90 points. India's record current account deficit and a depreciating rupee continue to weigh on the market performance as well.
In the currency market, the rupee fell by 37 paise to again slip below the 60 mark to 60.03 in early trade at the Interbank Foreign Exchange market.
Banks fall after RBI issued draft guidelines that would require banks to make higher provisions and increase risk weights on exposure to companies that have unhedged foreign-currency exposure.
State Bank of India fell 3.5 per cent and HDFC Bank was down 2 per cent while RIL and HDFC were down 2 per cent each.
BSE realty index was down 4.5 per cent. Unitech declined 8.6 per cent.
Bank stocks fell after RBI issued draft guidelines that would require banks to make higher provisions and increase risk weights on exposure to companies that have unhedged foreign-currency exposure.
The wide-based National Stock Exchange index, Nifty slipped below the 5,800 level by falling 60.60 points, or 1.03 per cent to, 5,796.95.
Brokers said sustained selling by funds amid a weakening rupee and subdued trend in the Asian region, mainly dampened the trading sentiment here.
In the Asian region, Hong Kong's Hang Seng index traded lower by 2.05 per cent, while Japan's Nikkei Index fell 0.06 per cent, in early trade.
The US Dow Jones Industrial Average ended 0.28 per cent lower in yesterday's trade.
Rupee Extends Losses
The rupee fell by 37 paise on Wednesday to again slip below the 60 mark to 60.03 in early trade at the Interbank Foreign Exchange market, on heavy dollar demand tracking strengthening of the US currency overseas.
This is the first time since June 27 that the domestic currency has fallen below the 60 level. Rupee had touched an all-time low of 60.76 against the dollar on June 26.
Forex dealers said besides dollar gaining against other currencies to trade at nearly one-month high in the global markets on strong economic data, a lower opening in the domestic equity market also, put pressure on the rupee.
The rupee had depreciated by 14 paise to close at 59.66 against the dollar yesterday on defence-related dollar demand losses in the local stock market.