The market opened on a weak note, staged a recovery of sorts around mid morning, but faltered soon and then slipped deeper into the red in the final hour, as investors indulged in some heavy selling amid renewed worries about the outlook for the global economy following the release of some weak data from the U.S. and China.
Concerns about India's near term economic growth and continued selling by FIIs weighed as well.
The BSE benchmark Sensex, which plunged to 20,522.04, ended the day with a loss of 186.33 points or 0.9% at 20,536.64. The Nifty index of the National Stock Exchange closed at 6091.45, slightly off the day's low of 6086.45, recording a loss of 61.30 points or 1%.
In the forex market, the rupee opened at 62.38 against the greenback, down from Wednesday's close of 62.20 and weakened further to 62.45 a dollar subsequently. Recovering some lost ground subsequently, the rupee was last seen hovering around 62.25 against the U.S. dollar.
Bank stocks were the most prominent losers. Mirroring their decline, the BSE Bankex lost around 1.6%. A report showing a faster than expected contraction in Chinese factory activity in February, dragged down metal stocks.
Oil, information technology and FMCG stocks were the other notable losers. Automobile stocks found some support early on, but failed to hold at higher levels. Realty, capital goods, power, consumer durables and healthcare stocks ended on a mixed note.
ICICI Bank ended lower by over 2%. State Bank of India lost around 1.8%, while HDFC Bank and Axis Bank closed lower by 1% and 0.6%, respectively.
Bank of Baroda, Bank of India, Kotak Bank, Canara Bank, Federal Bank and IndusInd Bank lost 2% - 3.5%. Punjab National Bank, Yes Bank, Indian Bank, Corporation Bank, UCO Bank, Syndicate Bank, Oriental Bank of Commerce and Union Bank of India also ended sharply lower.
Among metal stocks, Tata Steel declined 1.8%, Hindalco lost about 1.5% and Coal India ended 1.3% down, while Sesa Sterlite ended lower by about half a percent. SAIL and NMDC also closed notably lower.
Bharti Airtel ended nearly 2% down. HDFC lost 1.6%. ITC, GAIL India, Infosys and Mahindra & Mahindra closed lower by 1% - 1.3%.
Hero Motocorp, Maruti Suzuki, Reliance Industries, ONGC, Hindustan Unilever, Sun Pharmaceutical Industries and Cipla lost 0.5% - 1%.
Grasim Industries, ACC, IDFC, Ambuja Cements, Asian Paints, BPCL and HCL Technologies lost 1.5% - 2.3%.
Jaiprakash Associates (5.5%), Dr Reddy's Laboratories (1.9%), Bajaj Auto (1.6%) and Tata Power (1.5%) bucked the trend and closed on a firm note. Larsen & Toubro, DLF and Power Grid Corporation closed with modest gains.
UFlex plunged sharply to Rs 60.35 on reports the income tax department has raided 37 premises associated with the company in nine cities. However, the stock recovered from its low and eventually ended the day at Rs 67.70, down 3.7% from its previous close.
Esab India closed lower by over 9% on weak results. The company reported a sharp 33% decline in net profit to Rs 7.06 crore in the quarter ended December 2013. Net sales dropped 10.5% to Rs 109.30 crore.
DCM Shriram Consolidated ended nearly 13% up following an announcement from the company that its board will meet on 22 February 2014 to consider various options for rewarding shareholders, including share buyback, bonus issue and dividends.
The market breadth was weak. Out of 2820 stocks traded on BSE, 1480 stocks declined. 1192 stocks moved up and 148 stocks ended flat.