In a highly volatile trade, the benchmark BSE Sensex on Thursday fell by 24 points to 26,813.42 amid sustained foreign fund outflows triggered by deficient monsoon forecast, RBI's cautious stance on economic recovery and rupee slumping to 20-month low.
Sentiment remained weak after the Met department projected monsoon this year to be "deficient", triggering fears of a drought that may negatively impact corporate earnings and fuel inflation, traders said. Tata Steel was the top loser on Sensex by tumbling 2.58 % largely on weak metal prices in global markets and sluggish domestic demand.
Vedanta fell by 1.89 % to Rs 184 and Hindalco by 0.66 % to Rs 121.25.Of 30-Sensex shares, 19 ended lower, while 11 others, led by RIL, Wipro, HDFC and HDFC Bank ended higher to cap index's losses. The BSE barometer opened higher at 26,940.64 and touched a high of 26,948.84 on buying in badly beaten down blue-chip stocks of the past two sessions, but on profit-booking it surrendered most of early gains to touch a low of 26,551.97.
A round of late buying in select blue-chip stocks, however, helped Sensex to recover to close at 26,813.42 points, down by 23.78 points .The gauge has now lost 1,035.57 points in three sessions. The NSE Nifty after slipping below the 8,100-mark to touch the day's low of 8,056.75, staged a strong comeback to wipe off most losses on value-buying towards the fag-end and settled the day 4.45 points or 0.05 % at 8,130.65.
The rupee breached the crucial 64-mark to touch a 20-month low of 64.25 against the dollar (intra-session).Sectorwise, the BSE metal index suffered the most by falling 1.11 %, followed by healthcare 0.77 % , consumer durables 0.75 % and auto 0.70 %. BSE smallcap fell by 0.04 per cent, while mid-cap ended upby 0.17 %.
Globally, Asian markets ended mixed, while European markets were trading lower in their opening trade as the region's bonds extended a drop and another round of talks failed to end a Greek debt stalemate.