Apart from the key domestic worries including the falling rupee, gloomy global scenario on the backdrop of disappointing economic data from the US and euro-zone, too, dented overall market sentiment, forcing investors to square off their long position.
Extending its slide, trading resumed on weak note already under pressure from the government decision to penalise index heavyweight RIL and its British partner BP Plc alongwith bearish global peers.
The sell-off got further accelerated after Minister of State for Finance S S Palanimanickam statement in Lok Sabha that the government is considering a review of tax treaty with Mauritius to raise revenues from these foreign investments.
The overall trading sentiment was bleak with no definite trigger to be seen including European opening, which was bearish on euro-zone concerns amidst cautiousness ahead of the political fall-out.
The 50-share index plunged to an intra-day low of 5,070.60, before ending at more than three-month low of 5,086.85, a steep fall of 101.55 points, or 1.96 per cent, over its last close.
Banking counters continued to bleed for the second day impacted by the Basel III guidelines.
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Bank of Baroda, PNB, Axis Bank, L&T, BHEL, SBIN, HeroMotco, SesaGoa, Reliance Infra and Bajaj Auto were the top percentage-wise losers from the Nifty bunch, while select pharma stocks attracted some buying interest.
Turnover in cash segment rose to Rs 11,474.63 crore from Rs 10,004.24 crore yesterday. In all, 6,619.13 lakh shares changed hands in 55,60,178 trades. Market capitalisation stood at Rs 58,78,465 crore.