A year-end slide continued for the third straight day in the stock market on Thursday and the barometer Sensex slumped by 184 points amid heavy sell-off in market leader Reliance Industries and some blue-chip banking stocks.
Amid concerns about rising bad loans, banking giants like ICICI Bank, SBI and HDFC Bank lost ground on the bourses.
At the same time, the stocks from other segments also witnessed heavy sell-off on concerns that the companies might post weak quarterly profits next month due to a depreciating rupee, high interest costs and soaring input prices.
The BSE's 30-share benchmark index fell 183.92 points or 1.2% to close at 15,543.93 points -- its lowest closing level in more than a week or since December 20.
The NSE's 50-share Nifty index fell 1.3% or 59.55 points to close at 4,646.25.
The markets also shrugged off the news that food inflation has fallen to as low as 0.42%, the lowest in about six years -- a development that might help the RBI to start lowering interest rates after numerous hikes this year.
A high interest rate regime has been one of the major concerns for the market in 2012, during which the Sensex has already fallen by about 4,700 points or about 24%, and just one day of trading is left now for the year.
The Sensex has fallen by over 400 points in the past three trading sessions alone, while the current month has also been especially bad for the stocks.
December has traditionally been a strong month for the market and year-end rallies have been witnessed historically during this period.
However, the markets have been mostly trading with a downward bias so far this month, during which the Sensex has lost ground during 13 trading sessions and has gained value on seven days only.
Traders said that investors squaring up their pending positions on the last day of December month settlement in derivatives segment also led to fall in share prices. The sentiment was also hit because of fresh cues for a worsening debt crisis in Europe as well.
On domestic front, the market sentiments also turned bearish on reports that the country's current-account deficit could widen to a record high level this fiscal.
In today's trade, Maruti, BHEL, RIL, Tata Power and DLF were among the biggest losers with decline of more than three% each, while L&T, HDFC Bank, ICICI Bank, Tata Steel, Infosys and ONGC also lost ground.
Jindal Steel, SBI, Sterlite Industries and Hindalco were among the few Sensex gainers.
The overall market breadth was also negative with just about 40% stocks managing to register gains.
The metal and healthcare were the only two segments, whose sectoral indices closed with modest gains. However, the fall was less intense in the mid-cap and small-cap segments, as against the Sensex blue-chips.
Marketmen said that the trading was lacklustre because of the year-end holiday mood across the globe, while there was no major movements in Asian and European markets too.
Top heavyweight RIL was the biggest contributer to the Sensex fall and its shares fell by about 3.5% on reports that gas output from the company's KG-D6 gas field has declined to a fresh low.