Mumbai: Reserve Bank's dovish stand on policy rates Wednesday failed to soothe jittery investor nerves, which were hit by a fresh slide in crude oil prices, as the market benchmark Sensex plummeted by 286 points to close at 24,539.
Putting the ball in government's court, RBI Governor Raghuram Rajan kept the key interest rate unchanged saying that further easing will depend on "structural reforms" in the forthcoming Budget as well as macroeconomic factors.
The apex bank, which had cut interest rate by 125 basis points in 2015, retained the repo rate at 6.75 percent.
Besides, rupee weakening by 14 paise to 67.98 against the dollar also weighed on the domestic equities.
"The market was largely digesting the announcement, which was in-line with expectations. But a slip in Europe due to fall in crude prices has impacted Indian equities," said Vinod Nair, Head-Fundamental Research of Geojit BNP Paribas.
Globally investors are shunning risky assets like oil, equities and commodities, he added.
Back home, the BSE Sensex opened higher at 24,868.21 and moved up to 24,928.75 on initial buying. But on profit-booking it declined afterwards to 24,460.53 before finishing at 24,539, showing a loss of 285.83 points or 1.15 percent.
The NSE Nifty also broke below the 7,500-mark by falling 100.40 points or 1.33 percent to 7,455.55. Intra-day, it shuttled between 7,576.30 and 7,428.05.
Sector-wise, the BSE metal index suffered the most by plunging 4.33 percent followed by oil&gas (2.59 percent), infra (2.50 percent), healthcare (2.46 percent), PSU (2.45 percent), power (2.42 percent), realty (1.71 percent), banking (1.68 percent) and auto (1.39 percent).
Bucking the trend, shares of Bajaj Auto gained 1.48 percent to Rs 2,362.55 after the company reported 1.78 percent growth in total sales in January.
In overseas markets, Asian equities ended lower on fresh weakness in oil prices. But, Chinese stocks ended up by 2.26 percent after the country's central bank injected more liquidity into the financial system. Other indexes like Hong Kong, Japan, Singapore, South Korea and Taiwan declined by 0.32 percent to 0.89 percent.
European stocks were also lower as oil prices resumed their downward trend amid persistent concerns over the global economic growth. Key indexes in France, Germany and the UK dropped by 1.32 percent to 1.63 percent.
"Weak crude, weak global cues, depreciating currencies and FII withdrawals were the reasons for the carnage in the domestic markets," said Alex Mathews, Head - Research of Geojit BNP Paribas.
Out of the 30-share Sensex pack, 25 scrips ended lower.
Tata steel took the biggest hit as it plunged by 7.18 percent followed by NTpercent 4.28 percent, Sun Pharma (4.12 percent), BHEL (3.99 percent), Cipla (3.98 percent), ONGC (3.60 percent), Adani Ports (3.42 percent), ICICI Bank (3.02 percent), Coal India (2.92 percentt), Tata Motors (2.56 percent), RIL (2.54 percent) and SBI (2.00 percent).
Other prominent losers were Maruti Suzuki, M&M, GAIL India, TCS, HDFC Bank and Asian Paints.
From the gainers pack, Bharti Airtel surged by 1.92 percent while Bajaj Auto rose by 1.48 percent and Infosys perked up by 0.30 percent.
The small-cap ended in the negative zone by falling 1.25 percent and the mid-cap dropped 1.74 percent.
Among BSE sectoral and industry indices, metal fell 4.33 percent followed by energy 2.69 percent, oil&gas (2.59 percent), healthcare (2.46 percent), power (2.42 percent), utilities (2.11 percent),
industrials (1.79 percent), realty (1.71 percent) and bankex (1.68 percent), while telecom rose by (0.41 percent).
The market breadth turned negative as 1,843 stocks ended lower, 859 closed higher while 106 ruled steady. The total turnover rose to about Rs 2,935 crore from Rs 2,603.85 crore yesterday.