MUMBAI: The BSE Sensex provisionally fell 2.27 percent on Tuesday as deepening concerns about the global economic outlook and wobbly world markets dented investor appetite.
The 30-share BSE Index provisionally closed down 195.78 points at 8,411.30, with 26 components losing.
The 50-share NSE Index provisionally ended down 2.08 percent at 2,619.05.
In afternoon trade, the markets were trying to crawl back into the green with the Sensex ruling just 0.15 percent below its last closing figure, about 90 minutes before end of trade.
The 30-scrip Sensex, which opened at 8,583.06 points, was at 8,587.12 points, a fall of 12.84 points or 0.15 percent from its previous close.
Similarly, the S&P CNX Nifty of the National Stock Exchange (NSE) lost 0.06 percent from its last close to rule at 2,676.3 points.
The BSE midcap index was 0.61 percent lower, while the BSE smallcap index was down 0.42 percent.
Earlier, the Sensex fell 0.6 percent early, tracking weak world markets, with a brief pull back to positive territory attracting more selling. By 10 a.m., the 30-share BSE Index was down 0.62 percent at 8,554.11 points. The 50-share NSE Index was down 0.38 percent at 2,664.40 points.
"The fall in our markets will be lower than what we have seen so far," said S.P. Tulsian, an independent market strategist. "Short positions have been built up in a lot of stocks especially in the banking sector, so later in the day we can see short covering happening."
He said higher auto and cement sales in February indicated that the government's stimulus package such as cutting factory gate duty was helping revive demand.
Leading car maker Maruti Suzuki's car sales jumped 24 percent in February, while top motorbike maker Hero Honda saw two-wheeler sales rise 19 percent.
Cement shipments showed buoyancy with ACC reporting a rise of 3.6 percent in February while Ambuja Cements shipments rose 11.3 percent.
Asian markets were down on worries about the U.S. financial system after U.S. stocks slid to 12-year lows on Monday as a record $61.7 billion loss for American insurer AIG and another government bailout package for it heightened concerns about the extent of the damage to the financial system.
Japan's Nikkei was down 1 percent by 0315 GMT, while MSCI's measure of other Asian markets was down 0.3 percent.
Nifty futures traded in Singapore were trading down 0.3 percent, pointing to a lower opening in India.
The main BSE index closed down 3.2 percent on Monday at 8,607.08 points as bleak economic data and sliding world markets added to the gloom.
STOCKS TO WATCH
* Tata Motors Ltd, after India's top vehicle maker posted a 15 percent fall in February sales although passenger vehicle sales rose 1.5 percent.
* Ambuja Cements Ltd, after India's third-largest cement maker said its shipments in February rose an annual 11.3 percent to 1.65 million tonnes.
* PBA Infrastructure Ltd, after it won a road project worth 430.36 million rupees from Mumbai Metropolitan Region Development Authority.
