The Sensex ends (provisional) at 18,194 - down 246 points. Nifty ends at 5,461 - down 71 points.
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(Updated at 1436hrs)
Increasing nuclear hazards in Japan, following another blast at the ill-fated Fukushima nuclear plant, spread a cloud of nervousness around the world, as a reuslt of which the Indian bourses opened to negative start today.
After plunging to the day's low of 17,921 soon after opening, the Sensex recovered partially, but it remained in a negative belt throughout, up until the late afternoon trading session.
Over the past hour, the markets erased a portion of their losses, with the Sensex quoting at 18,275, 165 points down, while the Nifty was off 54 points at 5,477.
Japan's benchmark, the Nikkei 225, which declined 6% at close yesterday, was down 13% in early trades (IST), and this led to an opening of 18,030 for the Sensex, down 414 points, but the index soon regained during the late morning session, with energy shares leading the gains.
Reliance Industries at Rs 1,038 up 2% and Relaince Communications at Rs 102 up 1.3% were the only gainers on the Sensex.
Auto major Maruti Suzuki at Rs 1,210 down 4%, Jaiprakash Associates at Rs 81 and Sterlite Industries at Rs 158 both down 3% were the major Sensex losers.
On the whole, the scenario looked grim for investors around the world, as several analysts believe the crisis in Japan has assumed far greater proportion than the oil crisis in Libya, which sent oil prices spiralling to 2.5 year highs last week.
With several refineries shut down in Japan, oil demand is projected to decline temporarily, which may cool oil prices further.
As an after-effect, stock prices of several oil manufacturing companies rose because of the anticipations regarding reduction in subsidy margins for public OMCs.
The Oil & Gas index was the only index in the green on the sectoral chart at 10,021 up nearly 1%, with Reliance Industries, which gained 3% at close yesterday, at Rs 1,042 up 2.4%, and HPCL at Rs 337 up 1%.
"If the Libyan crisis spreads to other countries, there may be a spike in crude oil prices. However, at the same time, we would expect Japan to consume less amount of oil going forward because huge part of their economy will be impacted. Hence, we expect short-term correction in oil," said Vaibhav Sanghavi, Director (Equities), Ambit Capital, when asked about his views on the oil and gas sector.
A positive outlook on the government's advance tax collections did not seem to have any impact on the market sentiment, as all the sectoral indices traded in neagative territory.
The Realty index bore the brunt of heavy selling, and the index slipped 1.2% at 2,073. Top losers in this space were HDIL at Rs 159, Sunteck Realty at Rs 316 and Orbit Corp at Rs 49, all down 4%.
Auto stocks were dumped, because a majority of auto components, which are imported from Japan, will see a supply crunch due to the deteriorating condition in the country. Most auto manufacturing companies are located in Japan. Also, rising input costs have dented margins for auto companies, as have anticipations of a probable rate hike by the RBI, when the apex bank announces it's mid-quarter policy review due on MArch 17.
The Auto index was down nearly 2% at 8,682, and the top losers on the index were Maruti Suzuki at Rs 1,211 down 4%, Mahindra & Mahindra at Rs 644 down 3% and Exide Industries at Rs 133 down 2%.
