Stocks remained under pressure for the second consecutive session with benchmark Sensex on Tuesday sliding by another 135 points to end at one-month low levels as lingering worries over capital outflows linked to an early interest rate hike in US continued to rattle investors.
The overall sentiment remained largely weak after a massive sell-off on Monday spooked markets as a strong US jobs report triggered speculation that US Federal Reserve will lift rates from near-zero levels before mid-year, brokers said. Moreover, some investors preferred to stay on sidelines ahead of macro data including IIP and inflation this week.
The Sensex on Tuesday resumed higher at 28,924.06 and swung between a high of 28,949.11 and a low of 28,584.49 before finishing at 28,709.87, showing a hefty fall of 134.91, or 0.47%, over its last close. This is its lowest closing level since February 11.
Markets on Monday had logged their biggest slide in over two months as Sensex tumbled 604.17 points or 2.05%.
After trading lacklustre most part of the day despite a positive start, key indices turned highly volatile in late afternoon trade following heavy profit-taking in key frontline heavyweights dragging the market into deep red.
However, some low-level buying helped market regain some lost ground during fag-end trades.
"After the Budget, the most anticipated macro event which is watched by markets worldwide is the FOMC meet that is scheduled in coming weeks where markets fear rate hike," said Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio.
The NSE Nifty index dropped by 44.70 points, or 0.51%, to end at 8,712.05.
Shares of telecom firms such as Airtel, Idea and RCom were in the limelight after analysts said bidding intensity in the ongoing spectrum auction has subsided a bit.
Select stocks in auto space like M&M, Bajaj Auto and Hero Moto rose after car sales in India grew in February.
Also, industry body SIAM said it expects sales to be in positive with single-digit growth this fiscal.
Elsewhere, other Asian and emerging markets ended lower following a mixed bag of Chinese inflation data amid currency volatility against the backdrop of Fed rate hike concerns. Key indices in Japan, China, Hongkong, Singapore and Taiwan lost 0.19% to 0.94%.
Investor wealth was eroded by over Rs 1.80 lakh crore in two days in domestic markets.
Meanwhile, Europe was trading marginally lower in late morning deals as renewed concerns over the Greece weighed on sentiment. France's CAC was trading lower by 0.25 per cent, Germany's DAX by 0.29% and the UK's FTSE by 0.28%.
Coming back to Indian shares, the sectoral Realty index plummeted by 1.83%, Oil and gas by 0.78%, Power by 0.63%, Bankex by 0.49%, FMCG by 0.39% and Healthcare by 0.19%.
However, the technology and metal barometers rose. In the 30-share Sensex pack, 21 scrips ended with losses, while remaining 9 ended with good gain.
The total market breadth remained weak as 1,600 stocks ended in negative terrain, 1243 ended in positive while 118 ruled steady.
Major Sensex losers included HDFC that fell by 3.89%, Hindalco (2.06%), Hindustan Unilever (1.81%), Sun Pharma (1.58%), Tata Power (1.34%), Tata Steel (1.28%), NTPC (1.15%), Reliance Industries (1.10%, SBI (1.05%), Axis Bank (1%), Dr Reddys (0.83%), Sesa Sterlitte (0.78%) and Tata Motors (0.73%).
Notable gainers were Bharti Airtel that jumped 7.09%, Coal India by 3.84%, M&M 1.74%, BHEL 0.80%, Bajaj Auto 0.75% and Hero Moto 0.63%.
The total turnover on the BSE slumped to Rs 3,633.57 crore as against Rs 4,610.46 crore on Monday.