Panic selling in the last leg of trade saw the markets take a sharp dip.
According to media reports, CBI conducted raids in prominent finance companires -- LIC Housing Finance and Central Bank of India with regards to a multi crore housing scam.
As a knee jerk raction to this, banking and realty stocks slumped in trade on Wednesday.
The markets which already are dwindling under the global eco-and-political pressure, suffered a fresh jolt post this news.
The euro debt crisis depsite the Ireland bailout, China rate hike fears, tension between Korean neighbours and our very own 2G scam have spelled enough tourble for our markets so far.
The benchmark indices which scaled to record highs at the begning of the month, are down almost 8% so far.
Today morning, the markets began on a positive note, and gained strength mirroring a pull back in the Asian counterparts.
The Sensex marched to a high of 19,835. However, the market lost its steam and pared some of its gains to trade range bound in mid-morning before slipping into red thereafter.
In the broader markets, the smallcap and the midcap indices ended in the negative.The midcap index lost 1% at 8,094 while the smallcap index managed to buffer its losses to end down 0.5%.
Goenka Diamond surged 19.5%, MSK Projects up 13.8% and Splash Media, which gained 12.11% were the top gainers from the smallcap space.
Money Matters down 20%, Man Infraconstruction and MVL shedding 15% and 9% respectively are the top losers in the midcap space.
On the Asian front, the markets closed mixed. After closing down 2.7% yesterday, Hang Seng recovered to close in the green today, gaining 0.5% at 23,023.
The Shanghai Composite closed 1% higher with banks leading the gains. On the other hand, Nikkei, Seoul Composite and Taiwan Weighted dropped 0.1% to 0.8%, respectively.
In the European markets, DAX and FTSE are the only indices trading in the green, gaining 0.1% each. CAC is trading down 0.4%. The US index futures indicates that Dow may rise nearly 32 points at the opening bell.
Back home, the banking scrips that took the beating were Canara Bank was down 5%, Union Bank, Bank of India shed 4%. Federal Bank, SBI, ICICI Bank and Axis Bank dropped 3% each.
The tainted ones -- LIC Housing Finance slumped 18% to Rs 1,069, and Central Bank of India plunged 8% to Rs 198.
In the realty space, D B Realty was the biggest loser ending down 16% followed by Orbit Corporation and HDIL declining 8% and 6% each.
The gainers on the Sensex were Mahindra & Mahindra up 3%, Bharti Airtel,Tata Steel, ITC and Tata Motors were the other gainers.
On the losers list -- SBI, DLF shed 3% each followed by BHEL, ICICI Bank, HDFC Bank, HDFC and TCS down 2% each.
The market breadth was negative. Of the total 3,085 stocks traded on the BSE, 1,678 stocks declined while 1,239 advanced.