"There was the across-the-board selling after the fuel price hike on Wednesday, as it is expected that inflation will touch 9-10 per cent and that worried the market," said Biranchi Sahu, head of institutional equities, Khandwala Securities.
The Sensex ended at 15514.79, down 447.77 points, or 2.8 per cent. It moved between 15442.34 and 15992.90 during the day. The Nifty breached the important support of 4600 to end at 4585.60, down 130.30 points, or 2.8 per cent.
Intraday, it touched a low of 4564.50 and a high of 4731.50. The combined turnover on the exchanges was Rs 206.1 billion, compared with Rs 182.4 billion on Tuesday.
The government's decision to increase the petrol and diesel prices by Rs 5 and Rs 3 a litre respectively, and cut the duties on crude oil and oil products to shore up oil retailers' bottomlines took the market off lows initially. However, profit sales pulled down the oil marketing companies.
Bharat Petroleum Corporation was the top Nifty gainer earlier in the day, touching an intraday high of Rs 372, after the price hike was announced. The share, however, ended down 8 per cent at Rs 322 and was the worst hit on the Nifty.
The shares of Cairn India slid 7 per cent as crude oil prices retreated.
