India's benchmark Sensex plunged 467 points to touch the lowest in over three-months, as Germany's efforts to curb market volatility tripped stocks worldwide.Germany banned speculative short-selling in bonds, but the move sent the Euro crashing to a four-year low against the US dollar.
A weak Euro compounded concerns that austerity measures initiated by debt-laden Greece and other Euro zone nations may derail economic recovery.
Indian market was the worst hit in Asia, with the Bombay Stock Exchange's 30-share barometer sinking 467.27 points, or 2.77 per cent, to end at 16,408.49 points -- its lowest close since February 25.
The index opened weak, following negative cues from Asian peers and an overnight loss in US market, and things turned ugly in the post-afternoon session as stocks in Europe slumped in reaction to Germany's ban on short selling of some financial instruments, analysts said.
There is no end in sight to the European crisis.
Sentiments are negative and investors are looking for safer investment opportunities, which is resulting in an outflow from high risk markets, Reliance Securities said in a note.
The wide-based 50-share Nifty Index of the National Stock Exchange lost 2.89 per cent to settled at 4,919.65 points.
"Selling was so intense that the NSE Nifty shut shop below the 200-Day Daily Moving Average, which is considered as very crucial support for the markets. Market breadth was ruthlessly negative," IIFL Vice President (Research) Amar Ambani said.
ICICI Bank retreated 7.24 per cent to Rs 825 on the BSE.
The lender said on Tuesday it has agreed to merge the Bank of Rajasthan with itself in a share swap deal.
A wide spread sell was seen across the sectors and metal, realty, bankex and auto led the fall.
Tata Motors was the biggest loser in Sensex constituents, tanking 7.39 per cent. Sterlite Industries dropped 7.33 per cent and Mahindra & Mahindra declined 5.92 per cent.
Among the 30-blue-chip stocks on the BSE, 27 ended in red while three stocks Hero Honda, Cipla and Tata Power managed to close in green with nominal gain.
In the frontline financial stocks, HDFC dropped 2.54 per cent, HDFC Bank by 1.67 per cent and State Bank of India by 2.69 per cent. DLF lost 3.58 per cent.
Reliance Industries, which holds the maximum weight among the index components, went below the Rs 1,000 level and ended with a net loss of 2.19 per cent at Rs 998.30.
Markets in Asia also ended mostly lower. In Europe, Germany's DAX tanked nearly 3 per cent, while FTSE 100 of Britain plumbed 2.28 per cent in mid-trade.
