The 30-scrip Bombay Stock Exchange Sensex plunged 83.33 points to close at 4865.83. The Nifty Index also closed lower nearly 30 points at 1550.45.
The unwinding was on account of the additional ad hoc margins the National Stock Exchange (NSE) imposed on certain brokers failing which they would have to cut their outstanding positions in the derivatives segment. In the last two sessions the Sensex has lost around 140 points, swinging in a wide arc of 107 points during the day.
The volume of trading in the market was also reduced. The BSE recorded a turnover of Rs 2,058 crore, compared to Thursday's Rs 2,541 crore. There were nearly 2.5 losers for every gainer. Both the NSE and BSE will be holding a special two-hour trading session on Saturday.
Cement, auto and automobile stocks bore the brunt of the selling. In fact, cement share prices have lost ground for the second consecutive day. The largest loser was Larsen & Toubro which closed down nearly 5 per cent at Rs 390.85.
The decline in auto stocks was due to profit booking. The biggest loser in this segment was Maruti which closed 4.7 per cent lower to end at Rs 328.45. The stock was a gainer in the recent past.
The ONGC scrip's price plunged 2.61 per cent to close at Rs 623.10. So far as the oil companies are concerned, analysts said that the declaration of interim dividend by them could take time.
The Reliance Industries scrip too shed 2.63 per cent to close at Rs 464.35. Yet another key index stock, Hindustan Lever, was stagnant and closed flat at Rs 181.55.
Tech stocks were also at the receiving end of the sell-off which consumed the market, Satyam Computers and Infosys being among the biggest losers.
In NSE's derivative segment, Nifty futures continued to trade at a premium to the spot Nifty. The most active futures contracts were the Tata Motors, Tisco, Satyam and Reliance scrips.
The cost of carry (interest cost for carry forward) also has fallen quite dramatically in the last couple of sessions from an average of above 20 per cent to below 10 per cent as traders cut open positions.
