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For a second successive session, the Indian equity benchmarks closed near day's low as a combination of weak overseas markets, disappointing corporate earnings and sticky inflation dampened the sentiment. The worst part of today's trade was a steep selloff in the broader indices that spread to the frontline stocks.

The BSE Sensex closed at 16,882, down 236 points or ~1.4% from the previous close. It touched a day's high of 17,172 and a day's low of 16,837. It opened at 17,081.

The NSE Nifty shut shop at 5,068, down 80 points or ~1.5% over the last close. It hit a day's high of 5,158 and a day's low of 5,052 after opening at 5,131.

Other Asian markets too closed lower as rising yields in Italy and Spain sparked fresh concerns about the precarious fiscal health of the eurozone, notwithstanding the recent leadership change in Greece and Italy.

The real selling in the main indices started just before 2:00 pm (IST) as European stock benchmarks turned lower after an initial bounce and most Asian markets closed in the red. 

The Indian indices opened lower in response to the overnight fall in the US and European markets after yields on Italian and Spanish bonds jumped on Monday, raising doubts over the ongoing efforts to rein in the debt crisis. They managed to recover from early morning lows in late morning trade before slipping again.

The broader market suffered even more badly today with the BSE Small-Cap and Mid-Cap indices down ~2.5% apiece.

In terms of sectoral plays, the Realty index on the BSE was by far the biggest loser today (down over 5%). Capital Goods, Power and Banking indices were down 2% or more. 

Consumer Durables, Metals, PSU, Auto, Oil & Gas and FMCG indices were down between 1% and 2%. The rest of the sectoral indices on the BSE ended marginally down.

"Despite the recent political response, doubts prevail over the ability of the eurozone leaders to quickly deal with the credit crisis and avoid another recession. Investors are likely to remain wary until they see clear signs of the measures taking effect in Europe. Technically, markets around the globe appear to be in a consolidation mode after October's big gains. 

As far as India goes, the earnings season has wound up and the outcome has not been very encouraging amid high interest rates, stubborn inflation, a weak rupee and global slowdown. The coming quarters will be equally challenging. Further earnings downgrade are not ruled out going forward. In the near term the Indian market will be at the mercy of external developments," says Amar Ambani, Head of Research, IIFL. 

The Indian rupee today dropped past 50.57 per dollar to trade at its weakest in more than two-and-a-half years due to weakness in local equities and the euro.

Government data announced today showed that Germany's economy grew by 0.5% in the third quarter while the French GDP expanded by 0.4% during the July to September quarter.

GDP in the 17-nation eurozone grew by 0.2% in the third quarter as against the previous three months, the EU statistics agency Eurostat reported today. Compared to the third quarter of last year, GDP grew by 1.4%. Both figures were in line with forecasts. 

The euro fell for a second day as Italy’s prime minister designate faced resistance to form a new Cabinet.

The 17-nation currency declined to a one-month low against the yen as Italy’s 10-year yield approached the 7% threshold that prompted Greece, Ireland and Portugal to seek bailouts. 

The dollar and yen advanced amid rising risk aversion. The Swiss franc weakened after central bank Vice Chairman Thomas Jordan said it remains a very strong currency.