Global market gloom pulled down the Sensex, the prime index of the Bombay Stock Exchange (BSE) by 0.8 percent, Wednesday, ending the four-day bull-run which saw the 30-stock benchmark index gain over 1000 points.
Uncertainties about the US economy and expiry of monthly derivatives weighed on market sentiment as the Sensex plunged 0.81 percent, or 130.66 points to close at 16,086.83 in see-saw trade. The index touched a high of 16,309.88 and low of 16,009.87 during intraday trade.
The benchmark index, which had climbed to a three-week closing high on Tuesday, is down nearly 21 percent in 2008.
While India's No.2 bank, ICICI Bank, which had risen more than 9 percent on Tuesday, shed 4.17 percent to Rs.843.25, its bigger rival State Bank of India (SBI) dropped 1.53 percent to Rs.1713.60.
Top mobile services provider Bharti Airtel erased most of its Tuesday's gains to end 3.75 percent lower at Rs.803.10. Rival Reliance Communications slipped 2.25 percent to Rs.526.10.
Sensex heavyweight top-listed Reliance Industries fell 0.68 percent to Rs.2298.70 while engineering and construction major Larsen & Toubro (L&T) slipped 0.28 percent to Rs.3046.30. The two stocks contribute to nearly a quarter of the weight of the prime index.
Tata Motors, which confirmed on Wednesday the acquisition of Ford's British motoring marques Jaguar and Land Rover for $2.3 billion, saw its stock fall 0.08 percent at Rs.679.40.
Hindustan Unilever (HUL) slipped 4.31 percent to Rs.234.40 while BHEL fell 2.86 percent to Rs.1954.95.
India's top real estate developer DLF Ltd saw its stock plunge 3.07 percent to Rs.657.80.
Jaiprakash Associates (down 3.02 percent to Rs.226.05), Ambuja Cements (down 1.93 percent to Rs.122.15) and oil major ONGC (down 1.11 percent to Rs.1063) ended in the negative zone.
Power majors NTPC and Reliance Energy slipped 1.43 percent and 0.19 percent to Rs.196.75 and Rs.1297.65 respectively.
Pharmaceutical majors Ranbaxy Laboratories and Cipla ended down 0.76 percent and 1.95 percent at Rs.448.10 and Rs.205.65 respectively.
IT major Wipro fell 1.31 percent to Rs.429.
Hindalco shed 0.83 percent to close at Rs.161.80.
The top gainers of the day were Tata Steel (up 3.79 percent to Rs.657.85) and ITC (up 2.09 percent to Rs.195.10).
Top mortgage lender Housing Development and Finance Corporation (HDFC) gained 2.73 percent to Rs.2660.35 while HDFC Bank rose 1.64 percent to Rs.1441.15.
IT stocks Satyam Computer Services, Tata Consultancy Services (TCS) and Infosys Technologies zoomed 0.47 percent, 0.38 percent and 0.20 percent to Rs.413, Rs.879.30 and Rs.1495.60 respectively.
Others stocks posting gains included ACC (up 0.21 percent to Rs.817.35), Grasim Industries (up 0.14 percent to Rs.2690.65), Maruti Suzuki (up 0.07 percent to Rs.845.35) and Mahindra & Mahindra (up 0.04 percent at Rs.680.05).
Among the sectoral indices, BSE Consumer Durables (up 1.55 percent) and BSE Metal (up 1.01 percent) registered solid gains while BSE Bankex (down 0.83 percent), BSE Oil & Gas (down 0.82 percent), BSE TECk (down 0.79 percent), and BSE Healthcare (down 0.75 percent) ended in the red.
Other indices see-sawed to close in a range of (+)0.39 to (-)0.58 percent.
The BSE market breadth was overall positive with small and mid-cap companies in demand. The BSE Midcap and Smallcap indices climbed 1.56 percent and 2.12 percent to 6271.03 and 7438.96 respectively.
In the broader market, 1,733 shares advanced, 978 shares declined and 50 shares remained unchanged.
The broader 50-share index S&P CNX Nifty of the National Stock Exchange (NSE) fell 1.0 percent or 48.65 points to 4828.85, after hitting an intraday high of 4912.30 and a low of 4808.65.
Wednesday's volatility can be attributed to yesterday's rise and futures and options expiry, both put together, said Gajendra Nagpal, CEO at Unicon Financial.
Monthly derivative contracts expire on the last Thursday of every month, but most are rolled over to the next month.
Once the F&O expiry is behind us, March quarter results will dominate the show. Bad news has been mostly factored in the prices. So any positive management guidance will trigger fresh buying, Nagpal, who expects the volatility to continue in the short-term, said.
This is not going to sustain. People are buying mid-caps and small caps as they had fallen sharply. But you will also see selling coming at higher levels, said Vinod Bansal, director at investment advisory firm Ficuswealth.
Sentiment has become comparatively less hesitant and a bit of sanity is coming back into the market, but volatility is still very high on account of global uncertainties, and that's causing a sense of discomfort, said Bharat Dalal, fund manager at Dawnay Day AV Financial Services.
Elsewhere in the region, Karachi's 100-share index gained 0.51 percent to 15,199.37, while Colombo's All-share index edged up 0.15 percent to 2549.56.
Most Asian markets displayed mixed results on Wednesday. Japan's Nikkei 225 ended 0.3 percent lower, Hong Kong's Hang Seng was up 0.68 percent, South Korea's Kospi was up 0.3 percent, Taiwan's Taiex was down 0.3 percent and Singapore's Straits Times was down 0.38 percent.