Mumbai: January 27, 2010 - Equity benchmarks witnessed one of the worst falls in the last three months as bears came out strong and hammered stocks across the board. Negative global cues and sustained selling by foreign institutional investors pulled down the indices forcing unwinding of long positions. The market witnessed highest turnover of Rs 1.83 lakh crore.

Indian market on Wednesday opened in the red after Republic Day celebrations and drifted lower reacting to fall in other indices a day earlier. Asian markets had corrected sharply on the back of implementation of a clampdown on lending by China and cut in rating outlook on Japan by Standard & Poor's.

Bombay Stock Exchange’s Sensex ended the day at 16289.82, down 490.64 points or 2.92 per cent. The 30-share index touched a low of 16230.85 and high of 16708.60 in today’s trade.

National Stock Exchange’s Nifty closed at 4853.10, down 154.80 points or 3.09 per cent. The broader index touched an intraday low of 4833.05 and high of 5008.50.

“We continue to advise caution for the Nifty, which we believe has started correcting and will do so at least up to a level of 4400. From there I see the bottom around 4200, which will develop as a very strong base for the next upmove.

Moving away from technicals, fundamentally we still believe that Infotech and Capital Goods will outperform. However, the auto sector cannot be ignored since it is one sector which has come out of the recession in the true sense,” said Vinay Pandit, vice president, head of research, IFCI Financial Services.

BSE Midcap Index was down 3.98 per cent and BSE Smallcap Index slipped 5.06 per cent.

The downfall was led by sharp decline in the rate sensitive sectors ahead of the Reserve Bank of India’s policy meet. The Central Bank is expected to hike Credit Reserve Ration by 25-50 bps and key keep interest rates unchanged.

Metal shares were down on fears of rising inventories in China ahead of New Year Celebrations. Chinese monetary tightening to control growth is also likely to impact prices, said analysts. More