Across-the-board selling ahead of the RBI policy review meet led the benchmark index NSE Nifty to tank by a massive 79 points and close below 6,300 level on the NSE today as the market digested Reserve Bank chief's comment that dented hopes of rate cut next week.
Rate-sensitive stocks led the fall in today's trade.
The market, which had been posting gains on good corporate earnings, crumbled on rate hike worries reflected in RBI Governor Raghuram Rajan's overnight comment inflation was a "destructive disease" that was forcing the apex bank to keep rates high.
Weak global cues along with steep rupee depreciation also put pressure on the market.
Almost all the sectoral indices fell heavily with Bank Nifty losing nearly 2 per cent followed by those representing infra, metal, auto and pharma sectors.
Ranbaxy dropped 19.43 per cent as US health regulator USFDA banned the pharma major from producing and distributing drugs for the American market from its Toansa plant in Punjab.
The bourses opened lower on weak Asian stocks and continued to trade in negative amid volatility before ending in deep red.
Meanwhile, foreign institutional investors (FIIs) bought shares worth a net Rs 433.60 crore yesterday, as per provisional data from the stock exchanges.
The 50-share index hovered between a high 6,331.45 and a low of 6,263.90 before settling at 6,266.75, a fall of 78.90 points, or 1.24 per cent, over the previous close.
Major losers were Ranbaxy, JP Associate, PNB, Ambuja Cement, DLF, Bank of Baroda, BHEL, IndusInd Bank, Tata Steel and Tata Motors.
Turnover in the cash segment rose to Rs 10,755.34 crore from Rs 10,406.51 crore yesterday. A total of 5,173.72 lakh shares changed hands in 55,65,394 trades, while market capitalisation stood at Rs 67,44,632 crore.