The BSE Sensex after taking a day's breather fell by 81 points to close at 24,772.97 on Thursday with rupee plunging to multi-year lows, while investors ignored the better-than-expected third quarter numbers of Infosys.
The rupee cracked below the 67-mark again against the US dollar by slumping 44 paise to Rs 67.29 -- a level not seen since September 2013.
Besides, Infosys reported a robust 6.6 per cent rise in its third quarter net profit and raised its annual revenue growth forecast, sending shares up 4.28 per cent.
Consolidated net profit rose to Rs 3,465 crore in December quarter compared with Rs 3,250 crore in the same period a year ago, the IT major said in a statement.
Meanwhile, deflationary trend eased in December with WPI inflation moving up to (-)0.73 per cent as food articles, mainly vegetables, turned costlier.
"Indices consolidated post sharp recovery after the release of WPI numbers, which remains in the negative zone.
Weak global indices also weighed on the sentiment," said Gaurav Jain Director Hem Securities.
On weaker Asian and European cues, the benchmark BSE index had opened about 300 points lower to hit a low of 24,473.22.
However, on revival of value-buying in select counters it managed to regain 25,000 mark briefly and touched a high of 25,018.46. Finally, it ended 81.14 points or 0.33 per cent down at 24,772.97. The gauge had gained 172.08 points in Wednesday's highly volatile session.
The NSE Nifty settled the day 25.60 points or 0.34 per cent lower at 7,536.80.
Shares of Tata Steel slumped 3.36 per cent to close at Rs 238.70 after global rating agency S&P downgraded the company on weak operating performance.
Besides, stocks of Axis Bank, SBI, ICICI Bank and HDFC Bank too suffered losses of up to 3.90 per cent, dragging down the BSE Banking index by 1.67 per cent.
Asian stocks ended in a negative zone with sentiment hit adversely due to a selloff in US stocks. Key indices like Hong Kong, Japan, Singapore, South Korea and Taiwan fell by 0.59 per cent to 2.68 per cent while Shanghai Composite index ended with gains of 1.97 per cent.
Key European indices like France, Germany and the UK fell between 1.76 per cent and 2.43 per cent.
Back home, out of the 30-share Sensex pack, 21 scrips ended lower.
Major losers were Tata Motors (2.63 pc), SBI (2.56 pc), L&T (1.98 pc), GAIL (1.62 pc), Hero MotoCorp (1.52pc), RIL (1.50 pc) and ICICI Bank (1.47 pc).
Other gainers were Lupin 3.02 per cent, Asian Paints (2.39 pc), Cipla (0.84 pc), Dr Reddy's (0.84 pc) and ONGC (0.83 pc).
In broader markets, the BSE small-cap index edged lower by 1.27 per cent while mid-cap shed 1 per cent.
Among BSE sectoral and industry indices, capital goods fell 1.77 per cent followed by bankex 1.67 per cent, industrials (1.65 pc), realty (1.46 pc), power (1.32 pc), auto (1.27 pc) and metal (1.19 pc).
However, IT rose by 1.93 per cent followed by teck (1.54 pc) and FMCG (0.16 pc).
The market breadth remained negative as 1,883 stocks ended lower, 805 closed higher while 171 ruled steady. The total turnover dropped to about Rs 3,149 crore from Rs 4,506.31 crore on Wednesday.
The Indian rupee tumbled by 44 paise to more than 2-year low at 67.29 against the American currency on fresh dollar demand from banks and importers amidst volatile equities.
The Indian unit resumed sharply lower at 66.98 per dollar against yesterday's closing level of 66.85 per dollar at the Interbank Foreign Exchange (Forex) market and dropped further to 2-year low to 67.30 per dollar before concluding at 67.29 per dollar, showing a loss of 44 paise or 0.66 per cent.
The rupee had last settled at 67.63 per dollar on September 3, 2013 and intra-day trade at 68.62 per dollar on September 4, 2013.
It moved in a wide range of 67.30 and 66.98 during the day.
The dollar index was down by 0.17 per cent against a basket of six currencies in the late afternoon trade.
In Asian market, the yen was slightly higher against the dollar and other currencies, as investors bought the perceived safety of the Japanese currency following renewed volatility in stocks.
The US dollar edged lower against the euro and yen yesterday, as a rally in oil prices faded and the Federal Reserve s Beige Book painted mixed picture of the US economy.
Brent oil stayed below USD 30 a barrel as prices remained weak in Asia trade after US crude and fuel inventories rose, adding further anxiety over a global supply glut.
The benchmark BSE Sensex dropped by 81.14 points or 0.33 per cent to close at 24,772.97.
In forward market, premium for dollar dropped further on persistent receivings by exporters.
The benchmark six-month premium payable in June moved down further to 189-191 paise from 193-195 paise previously and forward December 2016 contract also fell to 398-400 paise from 403-405 paise yesterday.
The RBI fixed the reference rate for the dollar at 67.0950 and for the euro at 72.9725.
In cross-currency trades, the rupee fell against the pound sterling to finish at 96.81 from overnight close of 96.44 and also dropped against the euro to conclude at 73.57 from 72.37.
The domestic currency fell against the Japanese yen to settle at 57.24 from 56.56 per 100 yen yesterday.