Mumbai, May 10: Investors scampered out of shares and the rupee faltered on rising concerns of a fractured mandate at the end of the last phase of elections.
The sensex skid 113 points, or 2 per cent, to 5555.84 in a plunge that washed away Rs 22,000 crore worth of shareholder wealth on Dalal Street, where the market capitalisation of all stocks on BSE stood at Rs 12,50,000 crore.
Fund managers fretted about the prospect of having to live with a National Democratic Alliance that will be the largest political formation, but not big enough to command a clear majority and speed up reforms.
The slide also followed weakness in Asia, where stocks floundered on mounting fears of a Chinese slowdown and rate-induced dollar gains over the past week.
There is a perception that interest rates in the US are on their way up, a prospect that will send foreign investors queuing up for American bonds and securities.
“The markets are suddenly labouring under a lot of negatives,” said a fund manager affiliated to the largest mutual fund in the country. The sentiment in the market was fragile from the start as the sensex opened weak.
The rupee fell nearly a per cent against the dollar to its lowest close in seven weeks as concerns mounted over the shape of the new government and a hardening dollar abroad.
The currency closed at 45.07, its lowest finish since March 22. Traders talked of Reserve Bank of India’s intervention through dollar sales in the inter-bank forex market.
The sensex opened at 5628.61 and nose-dived to an intra-day low of 5501.17 before a late-session recovery triggered by bargain-hunting pushed it back to 5555.84. Some index-based shares recouped early losses on fresh low-level buying, helping indices close claw back a little.
The turnover on BSE was Rs 1841.16 crore, down from Rs 1938.13 crore on Friday. Reliance was the top traded share with a tally of Rs 163.26 crore. It was followed by Maruti Udyog, with a volume of Rs 161.73 crore.
Index heavyweight Reliance Industries alone pulled down the sensex by 18 points, its share falling Rs 13.15 to Rs 519.15. State Bank shed Rs 15.60 at Rs 628.90, contributing 6.5 points to the slide in the main index.
ITC was down Rs 28.25 at Rs 1002.30, taking 8.5 points off the sensex, Infosys lost Rs 96.50 at Rs 5126.40, leaving the index poorer by 8.5 points and Larsen shed Rs 24.60 at Rs 557.55, burning a 10-point hole in the gauge.
Among the small pack of gainers, Bajaj Auto jumped Rs 14.20 to Rs 950.00, Bhel went up by Rs 13.85 to Rs 596.45 and HDFC Bank vaulted by Rs 9 to Rs 384.70.
The Securities and Exchange Board of India (Sebi) is “closely monitoring” the volatility in stock markets and has sought data from bourses on the pattern of trading that led to the sharp fall in shares today.