Mumbai: After breathing a little easy on Tuesday, the markets came under pressure again on Wednesday pulling down the Sensex by 256 points to two-month low of 13,262.90 amid persistent concerns over global financial scenario even as troubled US insurer American International Group, Inc. (AIG) got a fresh lease of life.
Analysts said buying support is unlikely in the coming days as turmoil in global credit market will prompt investors to look for investment options other than stocks.
The Bombay Stock Exchange benchmark Sensex after notching up a more than 100 points in morning trade closed the day lower by 256 points at 13,262.90.
There were alternate bouts of buying and selling throughout the day which saw the Sensex swinging between a high of 13,620.74 and low of 13,127.96 points.
The broader 50-share Nifty of the National Stock Exchange also fell by 66.65 points, or 1.64 per cent, to close at 4,008.25 from its last close.
While banking stocks came under pressure after a brief respite on Tuesday, realty stocks continued to be battered as many realty firms are said to have exposure to US investment bank Lehman Brothers which has gone down.
While realty index took a hit of 4.13 per cent, bankex was down by 3.79 per cent.
Metal and FMCG indices also lost more than three per cent.
Sterlite Industries dropped a hefty 8.04 per cent and topped the list of prominent losers. Ranbaxy Labs, whose generic drugs were blocked in US, also lost 6.60 per cent.
ICICI Bank was down by 5.25 per cent on reports that the lender might need to make an additional provision of $28 million on its exposure to bonds issued by Lehman.
Traders said the market remained jittery even as the US Federal Reserve announced a bail out package for the sinking insurance giant AIG.
FIIs remained net sellers pulling out Rs 4,421.60 crore in the first fortnight of September.
However, Tata Motor gained 4.84 per cent, ONGC 2.80 per cent and Wipro 2.04 per cent.
In Asian indices, the Hang Seng was down 3.63 per cent, Shanghai Composite 2.90 per cent and Strait Times 1.71 per cent while the Nikkei, Kospi and Taiwan showed smart gains.
Meanwhile, the Reserve Bank yesterday initiated forex measures to support the sliding rupee, which virtually hit 47 level against dollar.
The market breadth was extremely negative with 1,740 losers against 886 gainers on the BSE.
The trading volume improved to Rs 5,813.24 crore from Rs 5,208.35 crore on Tuesday. ICICI Bank attracted brisk activity and recorded highest turnover of Rs 401.81 crore followed by United Spirits (Rs 341.76 crore), Reliance Capital (Rs 307.76 crore), RIL (Rs 265.54 crore) and Educomp Solutions (Rs 249.07 crore).
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