Mumbai, March 3: The sensex tumbled off a cliff today, plunging 900.84 points to record its second biggest single-day fall before closing at 16677.88, just about 70 points off this year’s nadir on February 12.

Spooked by the lack of clarity over the Rs 60,000-crore loan writeoff, banking stocks led the carnage and the sectoral index fell over 6.7 per cent. The State Bank of India fell about 9 per cent to Rs 1,923.40 on the BSE.

The 30-share bellwether index also reacted to a stream of negative cues from floundering global markets.

The 50-share benchmark index of the National Stock Exchange also melted by about 271 points to end below the 5000 level at 4953.

Huge selling pressure from foreign institutional investors (FIIs) and a lack of adequate buying support from domestic institutions wiped out around Rs 3.36 lakh crore of investor wealth today.

“Today’s fall has more to do with negative global factors rather than the budgetary proposals. Had there been some positive announcements in the budget, the market could have performed slightly better. But in the absence of any support from the finance minister, the market had no choice but to reflect the global weakness,” said a senior investment official with a leading mutual fund house.

“The hike in short-term capital gains tax and changes in the securities transaction tax will continue to affect the volume of trade for some more time,” he added.

Most of the Asian markets continued to fall for the second straight session over concerns of an imminent recession in the US economy. Japan’s Nikkei plunged by about 4.5 per cent, while Hong Kong’s Hang Seng and Singapore’s Straits Times index registered losses of over 3 per cent each.

“I think the volatility is going to continue in the short term, but it’s a brilliant time to buy shares for the long term. The market might see further lows going forward,” the mutual fund chief added.

Many analysts believe that the budget’s move to hike the capital gains tax can adversely impact the liquidity in the system, which is already trading on low volumes because of investors’ reluctance to build up fresh positions.

Mutual fund houses, which have historically provided support in times of crisis, are now choosing to stay away from equities until the market settles.

While some experts expect institutional investors to scale up their investments after the fourth quarter results start coming in, a handful of brokers believe the market will stabilise after the US Federal Reserve reviews its monetary policy on March 15.

“Mutual funds do not seem to have enough cash to participate in the market in a big way. Global factors look seriously weak at this moment. In the absence of any support, the market might sink lower to around 15500,” said Jigar Shah, vice-president (equity sales) at Motilal Oswal Financial Services Ltd.

Shah reckons that the Asian markets, including India, will see some stability if the US Federal Reserve trims its interest rates by another 50 basis points.

The FIIs were net sellers to the extent of Rs 711.31 crore today, according to the NSE’s provisional figures. Domestic institutional investors weren’t picking up enough stocks with their net buying estimated at Rs 80.47 crore. Shares of Reliance Industries dropped 6.24 per cent, while realty giant DLF’s stocks plunged 8.44 per cent.

BSE timings

Trading timings of the BSE and the NSE will be revised from tomorrow till March 18 as the sun’s position may disrupt connectivity, causing difficulties in receiving data via satellites.

There will be sun outage from March 4 to 18, between 11.45 am to 12.25 pm.

Trading on the bourses will start at 9.55 am and close at 4.15 pm local time, the exchanges said.

The two exchanges will stop trading between 11.45 am and 12.25 pm and resume trading from 12.30 pm.

Rupee hits a low

The rupee lost 36 paise to hit a five-month low of 40.38 against the greenback today, despite softening of the dollar to record low levels against its major rivals.

Forex dealers said the rupee was moving down for the last three days as if responding to concerns expressed by the government over its appreciation in the economic survey.

The Indian currency traded in a wide range of 40.12 and 40.41 during the day after resuming sharply lower 40.16 a dollar against Friday’s close of 40.02 a dollar.

Gold prices

Gold crossed Rs 13,000 per 10 gram in Calcutta, breaking all previous records, to end the day at Rs 13,005, a gain of Rs 220.

In Mumbai, gold rose Rs 180 to Rs 12,745, while in Chennai, it shot up Rs 175 to Rs 12,695. In Delhi, gold stood at Rs 12,800, an increase of Rs 200.