The BSE Sensex and NSE Nifty recouped more than half of losses in second half of trade to close 0.5% lower on Wednesday, even after the Indian rupee fell over 1% to hit a record low of 56.18 to the dollar and more than 2% decline in European markets. Recovery in later part of the session may be on hopes that the government may consider hike in diesel and petrol prices by this weekend. Government sources indicated that hike may take place after the completion of Budget parliament session, which ended yesterday. According to sources, the ministry believes fuel price hike not only will turn around sentiment but it will help the government to move on the fiscal deficit aspect as well as the current account deficit. The BSE benchmark touched an intraday low of 15,847.03, before closing at 15,948.10, down 78.31 points or 0.49% led by 20 components. The NSE benchmark dropped 24.85 points or 0.51% to 4,835.65. Listen to the accompanying audio to catch up on all of today's market action.. Despite a slew of rescue efforts initiated by the Reserve Bank of India in the past few days, latest one being the announcement last evening that it will buy government bonds worth Rs 12000 crore, the rupee continued with its downslide, hitting a fresh low of 56.18 today. At the time of closing of Indian markets, it was trading at 56.09, down 70 paise as compared to previous close of 55.39 a dollar. According to Sanjay Mathur, the head of research and strategy at Royal Bank of Scotland, the rupee needs policy response from the government and not administrative controls or intervention from the Reserve Bank. Mathur sees the rupee moving to 57-58 per dollar levels. European markets like France's CAC, Germany's DAX and Britain's FTSE were down 2% each ahead of informal European leaders summit today. A split between France and Germany over measures to tackle the euro-zone debt crisis and renewed speculation of a Greek exit from the 17-member currency bloc hit investor sentiment. Even retail sales data disappointed the street; UK's retail sales went down 2.3% in April (MoM) and down 1.1% (YoY). The euro, commodities and commodity-linked currencies all were under pressure whereas safe-haven demand pushed the dollar index to 81.830 (at highest level since September 2010). Euro hit 21-month low as against the US dollar. Brent crude, NYMEX crude, gold, copper and silver declined 1-1.6%. Back home, country's largest telecom operator Bharti Airtel topped the selling list, losing over 4%. Reliance Communications went down 2% and Idea Cellular lost 3.5% after brokerages downgraded these stocks. Engineering and construction major by sales Larsen & Toubro slipped over 1% whereas state-owned BHEL closed flat (it rallied over 2% intraday after fourth quarter numbers). Private sector lenders ICICI Bank and HDFC Bank fell around 0.5% whereas State Bank of India rose nearly 1%. Housing finance company HDFC declined 1.3%. Oil & gas producers Reliance Industries and ONGC went down 0.6-0.8% while state-owned gas transportation services provider GAIL rallied 3.4%. Steel stocks like Tata Steel, Jindal Steel and Sterlite Industries were down 0.8-2%. Among auto stocks, Tata Motors, Hero Motocorp and Bajaj Auto tanked 1-2% whereas Maruti Suzuki trimmed losses in late trade to close moderately lower. Country's largest software services exporters TCS and Infosys were up 0.2% while Wipro rose over 1%. In the second line shares, A2Z Maintenance shot up 6% amid heavy volumes after billionaire investor Rakesh Jhunjhunwala (RJ) and his wife bought shares worth Rs 26.5 crore of the company. Ahead of January-March quarter numbers, Jet Airways jumped 4% while Voltas tumbled 4.6%. About two shares declined for every share rising on the National Stock Exchange.

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