Market today reversed some gains of the past two sessions as the benchmark BSE Sensex cracked below the 28,000-level by dropping 189 points on slump in country's exports and continued depreciation in rupee.
Sentiment also took a hit as key goods and services tax (GST) bill could not be passed in the Monsoon Session of Parliament, which ended last week.
Sensex had gained by 550.05 points in last two sessions.
Banking shares were in the limelight as the government announced a slew of measures to revive the fortunes of the public sector lenders.
On BSE, Bank of Baroda climbed 15.15 per cent, Canara Bank surged 13.42 per cent, Bank of India jumped 8.72 per cent, Punjab National Bank gained 4.09 per cent and SBI rose 3.95 per cent.
Meanwhile, India's exports contracted for the eighth straight month by 10.3 per cent in July to USD 23.13 billion, pushing the trade deficit to USD 12.81 billion.
In the forex market, rupee posted surprise slide today as it depreciated by 37 paise to nearly two-year lows of 65.37 (intra-day) against the dollar.
The BSE Sensex after rising to 28,095.97 in opening trade, slipped into the negatively zone as selling pressure emerged and dipped below the 28,000-mark to touch a low of 27,739.13 but on low-level buying it recovered partially to close 189.04 points or 0.67 per cent down at 27,878.27.
The 50-share NSE Nifty, which dipped below the crucial 8,500-mark during the day, settled 41.25 points or 0.48 per cent, down at 8,477.30.
Among major laggards, stocks of drug maker, Cipla plunged 4.95 per cent despite posting better-than-estimated earnings.
Other losers were Hindalco, ONGC, Hero MotoCorp, Vedanta, Axis Bank, Dr Reddy's, RIL, M&M, HDFC, L&T, Bajaj Auto, HDFC Bank, NTPC, Maruti Suzuki, ITC, Infosys and TCS.
Sectorwise, BSE realty index suffered the most by falling 1.28 per cent, followed by capital goods by 0.99 per cent, oil & Gas (0.97 pc), auto (0.64 pc), power (0.50 pc), FMCG (0.35 pc) and IT index (0.33 pc).
Globally, Asian markets ended mixed as Shanghai Composite index rose 0.71 per cent and European markets were steady in their early trade.
