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The Nifty and the Sensex lost in excess of 1.7 per cent on Wednesday following a worldwide sell-off on equities.
The Nifty closed 1.71 per cent below yesterday’s close at 4,858.25, down 85 points.
The Sensex lost 298 points (1.83 per cent) to close at 16,030.09.
The Nifty breached 4850 levels and hit an intraday low of 4837.05 while the Sensex went down below the 16000 mark to record an intra-day low of 15974.6.
“Weakness in the Indian rupee is creating the problem,” said independent market analyst Mr Nirmal Rungta.
“The equation on oil is not improving for India despite softening of crude prices. But things should improve if rupee tops out.”
The rupee was trading at Rs 54.48 to a dollar down 42 paise from its opening price on Wednesday morning.
“The declining foreign exchange reserves limit the RBI’s ability to intervene in the local market and a burden of import bill also reduces the impact of the intervention,” said Mr Abhishek Goenka, CEO, India Forex Advisors.
“Even the recent steps taken by the RBI related to the exchange earner account and bank overnight limit didn’t provide much support to the rupee,” he added.
All the indices on the Nifty and the Sensex closed in the red.
Volatility was up 6.41 per cent and the IndiaVix closed at 23.71.
BPCL, PowerGrid, Cairn, Bajaj Auto and Kotak Bank were the top five Nifty gainers while Tata Motors, Tata Steel, SAIL, R-Infra and JP Associates were the top losers.
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