The BSE benchmark Sensex tumbled by yet another 388 points due to persistent selling pressure from investors to settle at more-than five month low of 18,008.15, mainly led by FMCG, Realty, IT, Auto and Banking counters.
Fears of another round of hike in key interest rates in near future by the apex bank due to inflationary pressure and also rising global crude oil prices due to turmoil in Egypt, compelled operators and investors to book profits even at the current low levels.
According to market participants, the rise in interest rates might affect the bottomline of the companies in the next quarter earnings, resulting the interest rate sensitive stocks from realty, FMCG, banking and auto stocks suffered the most.
Statement by the Prime Minister Manmohan Singh that the economy has been on a high growth trajectory for the past few years, inflation posed a "serious threat to the growth momentum", also added fuel to the fire.
The Bombay Stock Exchange 30-share index touched a high of 18,542.20, but fell back sharply below 18K-mark to a low of 17,926.98 before concluding the week at 18,008.15, the level not seen since August 31, 2010 when it was ended at 17,971.12.
It showed a loss of 999.38 points or 5.26 per cent during the last two weeks.
The NSE 50-share Nifty also tumbled by 116.40 points or 2.11 per cent to finish below 5,400-mark at over 6-month low of 5,395.75. Previously, it had settled at 5,367.60 on July 30, 2010.
Upward revision of GDP growth to 8 per cent from earlier estimate of 7.4 per cent for the financial year 2009-10 by the government and also healthy growth of 6.6 per cent in output of the six core infrastructure industries in December 2010, indicating that the Indian economy is on a firm wicket failed to have major impact in share values.
A news that former Telecom Minister A raja was arrested along with his two former associates in connection with the 2G spectrum scam filtered in, the market washed out major part of its midweek gains.
Meanwhile, food inflation rose to 17.05 per cent for the week ended January 22 and a concerned Finance Minister Pranab Mukherjee assured that steps will be taken to moderate prices.
Among the major indices, the BSE-FMCG fell by 6.43 per cent followed by the BSE-Realty 3.53 per cent, the BSE-IT 3.21 per cent, the BSE-Auto 3.06 per cent, the BSE-Teck 2.67 per cent the Bankex by 1.21 per cent.
Small-cap and Mid-cap indices also dropped by 2.52 per cent and 2.38 per cent respectively.
However, the BSE-Metal index shot up by 108.86 points or 0.68 per cent and the BSE-Oil&Gas by 55.58 points or 0.59 per cent.
Total turnover at BSE and NSE rose to Rs 17,842.71 crore and Rs 66,685.07 crore respectively from the last weekend's level of Rs 13,753.69 crore and Rs 56,112.45 crore, respectively.