The 30-share Sensex ended at 16,640 down 206 points or 1.22% and the 50-share Nifty ended at 5,043 down by 67 points or 1.30%. The Sensex and the Nifty reached an intra-day low of 16,598 levels and 5,032 mark, respectively.
On the global front, Japan's Nikkei share average wrestled back almost 1 percent on Thursday, lifting off a seven-week low as investors picked up stocks on better-than-expected earnings, but the rebound was seen as limited because of concerns over global demand. Short-covering lent temporary support for battered stocks, while strong earnings for a few U.S. firms boosted Japanese companies in the same sectors.
European shares and the euro fell on Thursday as persistent worries about Spain and Greece combined with disappointing company earnings to undermine investors' confidence, but moves were limited by talk that central banks may be prompted into action. CAC, DAX and FTSE have dropped between 0.2-1%.
Back home, the country's crucial monsoon rains will improve in coming days, the country's weather office chief said on Thursday, which should narrow the shortfall in rainfall for the current rainy season that began in June.
Agriculture minister Sharad Pawar raised the prospect of drought for the first time this year, saying on Thursday officials would discuss next week the so-far meagre monsoon rains that are key to the economy of this major consumer and producer of food crops.
On the sectoral front, BSE Realty index crashed down by nearly 3% followed by counters like Capital Goods, PSU, Banks, IT and FMCG, all sloping down by almost 2% each. Sectors like Oil & Gas, Power, Metal, Auto and Consumer Durable fell by nearly 1% each. Infact, all the major BSE sectoral indices ended in red zone.
From the Capital Goods space, BHEL and L&T plummeted by almost 2% each. Bharat Heavy Electricals Limited (BHEL) gained in late noon trades after reporting a better-than-expected 13% year-on-year (yoy) growth in net profit at Rs 921 crore for the quarter ended June 2012. Analysts, on an average, expected a net profit of Rs 786 crore from the state-owned capital goods company.
Banking and financial shares like SBI, ICICI Bank, HDFC Bank and HDFC plunged between 1-3%.
Index heavyweight RIL dropped by over 1%. ONGC declined by over 2%. Shares of state-run
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