MUMBAI: Benchmarks spiralled lower today as a plunging rupee and Turkey's financial crisis sparked a retreat from equities, while lacklustre macro data further sapped investor confidence.
The BSE Sensex tumbled over 188 points to close at 37,663.56, while the broader NSE Nifty shed 50.05 points to crack below the 11,400-mark.
The rupee slumped to an all-time low of 70.40 per dollar (intra-day) on persistent foreign fund outflows.
Weak leads from other Asian bourses following Turkey's currency crisis and fears of an economic slowdown in China affected sentiment on Dalal Street, brokers said.
Trading momentum was further impacted as the country's trade deficit soared to a near five-year high of USD 18 billion in July, as per official data released after market hours on Tuesday.
After opening lower at 37,796.01, the 30-share Sensex slipped further to touch a low of 37,634.43, but a rally in Infosys, Sun Pharma and Tata Motors lent a helping hand.
The index finally settled at 37,663.56, down 188.44 points, or 0.50 per cent.
Markets were shut yesterday on account of Independence Day.
The NSE Nifty traded in the red for the major part of the session and cracked below the 11,400-mark to hit a low of 11,366.25.
It later recovered a bit to finish at 11,385.05, showing a loss of 50.05 points, or 0.44 per cent.
Meanwhile, foreign institutional investors (FIIs) offloaded shares worth a net of Rs 378.84 crore, while domestic institutional investors (DIIs) bought shares worth Rs 391.47 crore on Tuesday, provisional data showed.
"Market slid as depreciation in rupee on account of widening trade gap impacted investors sentiment. Additionally, domestic yield surged due to concern on inflation and weakness in INR.
"Moderation in oil price and expectation of reversal in FII inflow due to pick up in earnings will cap downside. On the sectorial front, metal and PSU bank under-performed while IT and pharma gained owing to deprecation in INR," said Vinod Nair, Head of Research, Geojit Financial Services.
Kotak Bank was the hardest hit in the Sensex pack, plunging 3.62 per cent, after the RBI on Tuesday said the recent stake dilution by the bank's founder Uday Kotak does not meet its regulatory norms.
Yes Bank, HDFC Bank, IndusInd Bank and SBI were also under pressure, falling by up to 0.80 per cent, mainly due to profit-booking.
Losses were also reported by Vedanta (3.05 per cent), HDFC Ltd (2.61 per cent), Tata Steel (1.87 per cent), L&T (1.64 per cent), Wipro (1.60 per cent), ONGC (1.35 per cent) Adani Ports (0.91 per cent), RIL (0.89 per cent), HUL (0.58 per cent) and M&M (0.30 per cent).
Gains of 2.98 per cent were seen in Sun Pharma after the company received approval from the US health regulator for an eye medicine.
Bharti Airtel, Axis Bank, ICICI Bank, Tata Motors, Hero MotoCorp, Maruti Suzuki, NTPC, Bajaj Auto, TCS, Coal India, ITC Ltd and PowerGrid also finished with gains.
IT stocks such as Infosys and TCS gained up to 1.17 per cent mainly due to a weak rupee, which boosted the dollar earnings outlook of software exporters.
In sectoral terms, the BSE metal index emerged as the worst performer, diving 2.18 per cent, followed by capital goods 1.05 per cent, consumer durables 0.96 per cent, finance 0.93 per cent, energy 0.86 per cent, bankex 0.64 per cent, oil and gas 0.48 per cent, realty 0.48 per cent, PSU 0.29 per cent and infrastructure 0.24 per cent.
Healthcare, IT, teck and auto indices closed in the positive terrain.
Broader markets too were under pressure. The BSE mid-cap index fell 0.48 per cent and the small-cap index lost 0.20 per cent.
Elsewhere in Asia, Hong Kong's Hang Seng shed 0.99 per cent, while Shanghai Composite Index too was down 0.63 per cent. Japan's Nikkei slipped 0.05 per cent.
Coming to European markets, Frankfurt's DAX was up 0.13 per cent, while Paris CAC rose 0.21 per cent in early deals. London's FTSE edged higher by 0.21 per cent.