New Delhi, September 22
Mirroring the steep fall in global markets, the Bombay Stock Exchange’s Sensitive Index (Sensex) fell 704 points today, its worst fall in two years on worries over the weak economic situation in the US and the spreading European debt crisis. The bellwether Sensex lost 4.13 per cent, to close at 16,361 points.

All the 13 sectoral indices closed with sharp losses of up to 6 per cent, while all 30 Sensex-scrips closed in red. Investors lost over Rs 2 lakh crore in the meltdown.

Global markets including US and Europe had fallen sharply and equities were under pressure. The US Federal Reserve’s view on the economy has got investors worried. There are also concerns over China’s manufacturing growth. The escalation of the 2G controversy on the domestic front did not help market sentiment, analysts said.

Tracking the meltdown in global stock markets, the rupee today plunged by 124 paise to close at nearly two-and-a-half years low of 49.57/58 against the US dollar, posing worries to policy makers on inflation front as a weak domestic currency will make imports costlier.

This is good news for exporter-oriented sectors like software, but will make imports like oil more expensive and may have an inflationary impact.

Dinesh Thakkar, CMD, Angel Broking said that Indian markets were looking to global cues for direction and global news-flow has mostly been negative, with no immediate respite in sight.

“With problems in Europe looming over the markets, inevitably our markets have also given up most of the recent gains and the Sensex and Nifty are once again heading towards year-to-date lows,” he said.

Among the big losers were RIL, Jaiprakash Associates, DLF, Sterlite, Tata Motors, Reliance Communications, ICICI Bank, Bharti, Jindal Steel, Infosys among others. All the Sensex 30 stocks closed in the red.

Kishor P Ostwal, CMD, CNI Research, said the drop in US market was not taken well by other global markets, which plunged 3-4 per cent. “In the absence of any domestic support, Indian markets may react to global trends in coming days i.e. if global markets rise we will rise and vice-versa,” he said.