Amids a sharp decline in Asian and European bourses, domestic exchanges fell like a pack of cards with benchmark Sensex losing over 500 points to two-month low level on selling by funds even as the much-awaited 700 billion dollar rescue package of US inched closer to final approval.
The BSE barometer closed the day lower by 506.43 points at 12,595.75, a level last seen on July 16. During the day, the key index touched a low of 12,402.84 points.
The 30-share Sensex had cracked the crucial 13,000-point level in early trade.
The wide-based National Stock Exchange index Nifty also plunged by 135.20 points, or 3.39 per cent. To 3850.05, after dipping to 3,777.30.
Marketmen said even as the investors feared that the US government's 700 billion-dollar bailout may just fail to meet its objective of tiding over the financial crisis, came the news of two European banks-- Belgian Fortis and British Bradford & Bingeley-- going the nationalised way.
The all-round selling pressure gained further momentum after reports the US financial crisis spreading in the European markets.
Banking index suffere hefty losses of 395.44 points at 6175.10, after segment major ICICI Bank dropped a whopping 12.11 per cent at Rs 493.30, State Bank of India by 2.04 per cent at Rs 1405, Karnatka Bank by 9 per cent at Rs 120.35, Oriental Bank by 7.30 per cent at Rs 148 and HDFC Bank by 3.71 per cent at Rs 1199.50.