Mumbai: The S&P BSE benchmark S&P sensex ended lower by 331 points at 6-week low to 19,429.23 on fresh selling pressure from operators mainly in Consumer Durable, Auto, Power, Banking, Refinery and PSU sectors due to fall in output amidst slowed down in foreign capial inflows.
The sentiment was also affected by a weak rupee which slumped to almost one-year low below 57.00 against the USD.
Ahead of its mid-quarter policy on June 17, RBI said its monetary actions in the coming months will be determined by the "monsoon outlook" and ensuing impact on inflation. This triggered selling by investors, who were betting on a rate cut by RBI this month, said experts.
With a HSBC survey showing that manufacturing sector output fell in the month of May -- first decline since March 2009 -- shares from oil&gas, power, consumer durables and capital goods saw selling pressure.
The Bombay Stock Exchange 30-share Sensex resumed higher at 19,859.22, but dropped to 19,395.32 before settling at 6-week low of 19,429.23, showing a loss of 331.07 points or 1.68 percent. It had last ended at 19,387.50 on April 29,2013.
The NSE 50-share Nifty also dropped by 104.95 points or 1.75 percent to finish at 5,881.00.
On the contrary, IT stocks were in keen demand on fall in the rupee value as it will boost their revenue. Infosys jumped nearly by 1.63 percent on hopes that co-founder N R Narayana Murthy, who will be assuming the post of executive chairman, will propel back the IT major into high-growth trajectory.
Country's top software services exporter TCS and third Wipro also rose by 1.56 percent and 2.77 percent.
"The sharp rise in dollar over last one month is actually what is putting pressure on equity markets. Further, the weak manufacturing PMI data too added pressure," said Milan Bavishi, Head Research, Inventure Growth & Securities.
Auto stocks fell as auto companies reported weak sales for the month just gone by. Shares of two-wheeler makers declined as OMCs raised petrol rate, traders said.
Shares of Reliance Industries (RIL) dropped by 2.60 percent even after the announced investment of Rs 1.5 lakh crore in core business of petrochemicals and oil and gas as well as in retail and telecom sectors in the next 3 years.
However, a weak rupee poses problems for corporates as it has a negative impact on dollar-denominated liabilities.
Meanwhile, Foreign Institutional Investors (FIIs) slowed down their investing activities by investing net Rs 772.60 cr during the week including the provisional figure of June 7.
22 scrips out of the 30-share Sensex pack ended lower while others finished higher.
Major losers were HDFC (5.65 percent), BHEL (5.07 percent), Hero MotoCorp (4.98 percent), Sterlite Ind (4.75 percent), Bajaj Auto (4.20 percent), Bharti Airtel (4.05 percent), Tata Motors (3.71 percent), HDFC Bank (3.38 percent) and Maruti Suzuki (3.19 percent).
However, Dr Reddy's Lab rose by 4.78 percent followed by Wipro 2.77 percent and TCS 1.56 percent.
Among the major indices, the S&P BSE-Consumer Durable dropped by 4.04 percent followed by S&P BSE-Auto 2.46 percent, S&P BSE-Power 2.37 percent, S&P BSE-Bankex 1.93 percent, S&P BSE-Oil&Gas 1.92 percent, S&P BSE-PSU 1.91 percent and the S&P BSE-Metal 1.21 percent.
The S&P BSE-Dollar 30 dropped by 2.36 percent, the S&P BSE-Dollar 100 by 2.18 percent and S&P BSE-Dollar 200 by 2.02 percent.
However, the S&P BSE-IPO firmed up by 1.62 percent, the S&P BSE-IT by 1.20 percent and the S&P BSE-Teck by 0.63 percent.
The total tunover at BSE and NSE dropped to Rs 8,946.16 crore and Rs 46,744.48 crore, respectively from the last weekend's level of Rs 11,585.85 crore and Rs 58,189.14 crore.