Sensex plunges by 285 points to 8,607.08

Indian bourses witnessed a virtual meltdown with the benchmark 30-share index plunging by 284.53 points to over a three-month low of 8,607.08 on Monday on extremely weak global cues amid a fourth straight monthly decline in the country's exports.

Market sentiment was also dampened by consistent FII outflows, which amounted to more than USD 1.6 billion in January and February this year. The broader 50-share Nifty of the National Stock Exchange also tumbled by 89.05 points or 3.22 per cent to close the day at 2,674.60 from its last close.

Asian indices ended lower by about three to four per cent while European markets were down by nearly three per cent in their early trade. India's exports declined by 15.9 per cent in January over the year-ago period, showing a fall for the fourth straight month as the global slowdown continued to affect demand for Indian goods. 

India's largest private sector firm Reliance Industries fell by 3.15 per cent after the company's swap ratio for the merger of Reliance Petroleum turned out to be a little better for the latter. RPL, however, was down 1.38 per cent.

Bank shares were the worst-hit on heavy sell-offs sparked by fresh fears of defaults in the ongoing economic slowdown. Finance minister Pranab Mukherjee has said GDP would expand at around seven per cent in 2008-09 while admitting that a little over five per cent growth in the third quarter was below expectations.

Brokers said the market, however, recovered from the day's low of 8,563.52 as domestic institutional investors absorbed part of FII unloading. Reliance Infra logged the day's biggest fall of 9.12 per cent, followed by Tata Steel (7.54 per cent), ICICI Bank (7.28 per cent), REL Comm (6.50 per cent), Jaiprakash Associate (5.0 per cent), HDFC Bank (4.43 per cent), L&T (4.40 per cent), TCS (4.39 per cent), ONGC (3.92 per cent), Hind Unilever (3.62 per cent) and SBI (3.10 per cent).

Despite the appreciating dollar against the rupee, the IT sector registered losses in line with a fall in their ADRs in US markets last night. The market breadth remained negative with 1,636 shares registering losses against 731 gainers.

The business volume continued to be low at Rs 2,587.98 crore. Edserv Softsystems Ltd, which was listed on the BSE today, clocked the biggest turnover of Rs 394 crore followed by RIL (Rs 205.89 crore), Educomp Solutions (Rs 116.43 crore), ICICI Bank (Rs 98.01 crore) and SBI (Rs 88.30 crore). The broad-based BSE-100 Index dropped by 139.19 points or 3.08 per cent to 4,377.19 from its last close.

The BSE-200 Index and the Dollex-200 was quoted lower at 1,013.88 and 326.01 at close compared to their last close of 1,044.94 and 342.12 respectively. Among the sectoral indices, the bankex dropped by 4.86 per cent and the metal index by 4.13 per cent.