The stock market breached the `Manic Monday' (May 22, 2006) lows as stocks continued their downward plunge on panic-like sales by retail and high net worth investors on Wednesday.
Dealers also attributed the bearish trend to redemptions by mutual funds, continued slump in global indices and outflows by FIIs.
Mid-cap and small stocks had the steepest fall with as many as 885 stocks on BSE hitting the downward circuit on Wednesday.
Frontline index BSE-30 Sensex closed at 9,756.76, down 200.56 or 2.01 per cent from Tuesday. This is 70.15 points down from the lows of 9,826.91 points recorded on May 22 when the index dived by over 1,100 points during intra-day on that day.
This is the worst closing for Sensex after February 3, 2006. With today's fall, the Sensex has wiped off 2,855.62 points or 22.64 per cent from the peak of 12,612.38 on May 10. NSE's S&P CNX Nifty Index on Wednesday fell by 76.85 points or 2.62 per cent to 2,860.45.
Since the market's peak, the investors have lost over Rs 6.81-lakh crore.
All the indices closed in the red with BSE Small Cap Index losing by about seven per cent while the BSE Mid-Cap Index fell by 6.25 per cent. Among sectoral indices, BSE Consumer Durables Index had the steepest fall, losing by 7.48 per cent, followed by BSE Metal Index (6.53 per cent) and BSE Capital Goods Index (4.80 per cent).
"Retail investors have been most badly affected as the fall has been relentless in small and mid-cap stocks. The investors are in a dilemma whether to continue holding the stocks or to book whatever profits that remain," said Mr Deepak Jasani, Head of Retail Research of HDFC Securities.
Market breadth was also distinctively negative at 2,240 declines versus just 181 advances on the BSE. Only two stocks — Bharti Tele and HDFC — survived the fall on the 30 Sensex stocks.
Net selling by foreign funds were marginal at Rs 70 crore on Wednesday, but dealers said mutual funds, which were net buyers in May, have turned big sellers due to redemptions. On the first two trading sessions of this week, mutual funds were net sellers for Rs 675.13 crore, while FIIs were also net sellers at Rs 655.80 crore in the same period.
The biggest loser on Sensex was L&T (down 6.59 per cent or Rs 140.35 to Rs 1,988.30) despite a liberal one for one bonus announcement, followed by Ranbaxy (5.97 per cent or Rs 23.20 to Rs 365.25). Heavyweight ONGC slipped below the Rs 1,000-mark and closed at Rs 993.30 while Reliance Industries fell below Rs 900-mark to close at Rs 891.65.