The markets continued to reel under persistent selling pressure which today shaved nearly 500 points off benchmark Sensex sending the barometer below 13k level for the first time since April 5, 2007 and strengthened widespread anticipation that it could touch 12K level soon.

Tracking extremely weak European markets, the 30-share Sensex closed the day at 12,961.68, a fall of 499.92 points, or 3.71 per cent.

Similarly, 50-share S&P CNX Nifty of the National Stock Exchange also ended below the psychological 4,000 level at nearly a 15-month low of 3,896.75, netting a loss of 143.80 points, or 3.56 per cent.

Under relentless selling pressure of the past three days, the BSE barometer had lost a whopping 1,460.14 points, or 10.12 per cent.

Marketmen said investor sentiment was already dampened by a lethal combination of inflation, higher interest rates and crude prices.

Brokers said investor's worries were augmented today as the European markets tumbled by 1.3 per cent to 2.4 per cent in their early trade today.

They said surging global crude oil prices, which were trading above USD 141 per barrel in Asian trade after hitting a new record at USD 143.67 in the preceding session, also another major concern for the market.

As panic selling continued today after leading banks hiked interest rates on home loans and other retail lending, realty and bank stocks took a battering and closed lower by a whopping 7.21 per cent and 5.62 per cent respectively.

Interest rates were increased by leading banks by up to 0.75 per cent.