The Indian bourses mirrored the global slide, triggered by US Federal Reserve's monetary stimulus exit plan, and tanked sharply during the week amid heavy off-loading by foreign funds and operators even as the rupee touched new lows against the dollar.
The S&P BSE benchmark Sensex dropped for a third week in a row, losing 404 points to end at 18,774.24 on Friday. Foreign funds sold shares worth Rs. 5,029.80 crore during the week, including the provision figure of June 21.
The Sensex resumed higher at 19,249.90 and moved up further to 19,383.61 amid RBI keeping key rates unchanged at its June 17 review meet, a move which was on expected lines.
However, the key index tanked 526 points on Thursday, its biggest single-day fall in nearly two years, on massive off-loading of shares following US Fed signal to exit monetary stimulus plan. A sharp fall in rupee, which hit a lifetime low of nearly 60 per dollar in mid-week, also spooked the markets.
Global markets went into a tizzy after Fed chairman Ben Bernanke said the central bank was likely to slow its bond- buying programme this year and end it in 2014. The Fed's$ 85 billion-a-month scheme offered easy money for markets, said traders.
The 30-share Sensex finally ended at 18,774.24, showing a loss of 403.69 points, or 2.10%, amid Finance Minister P Chidambaram' assurance that there was no need to panic over rupee depreciation and the RBI will take necessary action to stem the Indian currency's slide.
The widely-tracked BSE index has lost 986.06 points, or 4.99%, in the last three weeks.
The slowing down of Chinese manufacturing sector also weighed on the investors sentiment.
The NSE 50-share Nifty also dropped by 140.75 points or 2.42% to 5,667.65. It has also dropped by 318.30 points or 5.31% in the last three weeks.
Twenty-two scrips out of the 30-share Sensex pack ended lower, while eight others finished higher.
Major losers were Jindal Steel (15.74%), Hindalco (9.74%), ICICI Bank (5.28%), NTPC (5.26%), HDFC Bank (4.45%), GAIL (3.87%), Tata Motors (3.28%), BHEL (3.25%), Larsen (3.23%), Sterlite (2.89%), ITC (2.88%), SBI (2.73%), (RIL 2.47%) and Dr Reddy (2.42%).
However, Bajaj Auto rose by 3.79% followed by wipro 3.32%, Maruti 2.63% and Hero Honda 1.41%.
Among the major indices S&P BSE Realty fell by 5.72% followed by S&P BSE Bankex by 4.83%, S&P BSE Metal by 4.22%, S&P BSE PSU by 3.86%, S&P BSE Power by 3.78%, S&P BSE CG 3.01% and S&P BSE Oil&Gas 2.29%.
The S&P BSE Dollex-200 dropped by 5.27%, the S&P BSE Dollex-100 by 5.25% and S&P BSE Dollex-30 by 5.17%.
However, S&P BSE Teck and S&P BSE IT ended marginally higher by 0.89% and 0.30% respectively.
The total tunrover at BSE and NSE fell to Rs. 7,884.26 crore and Rs. 49,317.29 crore respectively from the last weekend's level of Rs. 9,845.95 crore and Rs. 51,080.54 crore.
Forex: The rupee bounced back from its all-time low of 60 registered on Thursday, but still continued its downslide for the seventh consecutive week to settle down by a whopping 176 paise at 59.27 against the Greenback on weak local equities and heavy dollar demand from importers and some banks.
Sustained capital outflows and firm dollar overseas following US Federal Reserve Chairman decision to slow down its bonds purchase programme, also weighed on the rupee.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed the week lower at 57.70 from last weekend's close of 57.51 even as RBI kept its policy rates on hold and touched a high of 57.55.
Later, it retreated to a life-time low of nearly 60 level on Thursday as market participants panicked after US Federal Reserve Chief Ben Bernanke said$ 85 billion a month bond buying programme may be slowed down from this year end, shattering all stocks as well as forex market globally.
However, a statement by chief economic advisor to the finance ministry Raghuram Rajan that the government is ready to take steps to curb volatility and "is not short of options" to tackle the slide in the rupee, helped it to recover some ground and settled at 59.27, still showing a steep fall of 176 paise or 3.06%.
In straight seven week, it has tanked by 533 paise or 9.88%.
The Indian benchmark Sensex this week tumbled by 403.69 points or 2.10%, extending losses for the third straight week while FIIs extracted Rs. 5,029.80 crore during the week, including provisional data of June 21.
Capital outflows also affected the market sentiment with FIIs offloading shares worth over Rs. 750 crore in two days, amid talks of continuing sell-off in debt as well. Since May-end, FIIs have sold around$ 5 billion debt securities.
"Forex markets were nervous ahead of the Fed meeting. More than demand and supply, the sentiment was very poor. The decision of whether Fed will taper bond-buying will only be known on Wednesday...It's not right time for RBI to intervene as the trend is bearish," said Mohan Shenoi, President - Group Treasury & Global Markets, Kotak Mahindra Bank.
Local factors like poor trade data also affected rupee on Saturday. "Depreciation is mainly due to concerns of high CAD. Also, widening trade deficit data for May had also impacted the local currency today (Saturday)," said Corporation Bank general manager P Paramasivam, who looks after treasury operations.