Weak global cues aggravated a dramatic selling across counters towards the end of trading on Wednesday, dragging down the benchmark Sensex by over 200 points to extend losses for the second day in succession.
The markets were bearish till late mid-session on weak Asian cues. A weak opening in European stocks fuelled heavy selling by cautious operators. Marketmen said investors ignored economic growth projection of 6.75 per cent this fiscal by the Prime Minister's Economic Advisory Council.
The Bombay Stock Exchange 30-share index declined sharply to trade below 17K-level at one-week low of 16,997.86. The Sensex, however, managed to settle the day at 17,009.17, a fall of 213.84 points or 1.24 per cent over its last close.
In two days, markets have lost over 300 points.
Brokers said investors are concerned that the sale of shares worth over Rs 32,000 crore to institutional investors by the Indian firms in the last more than six months could suck liquidity from the secondary market.
Asian indices today finished lower by less than one per cent each on sluggish trend on Wall Street overnight. European markets such as France, Germany and UK were trading lower by about 0.5 per cent and 1.0 per cent in their afternoon trade.
Auto, FMCG, banking and metal counters were hit badly and their indices closed lower in the range of 1-2 per cent.
Among Sensex stocks, Tata Steel lost close to 4 per cent followed by Jaiprakash Associates, SBI, HDFC and Heor Honda atwhich all closed down in the range of 3 per cent.