The markets ended sharply lower, after seeing consolidation in the last two-and-a-half sessions. A correction was due as the markets had run up quite significantly in a short span of time and were trading way above valuations.

Heavyweights witnessed huge selling pressure ahead of F&O expiry on Thursday, which dragged the Nifty below the 4100 mark and the Sensex below the 13600 level during the day. The NSE advance:decline ratio declined in favour of declines to 1:2 from 10:1 in the morning.

Profit booking was seen in telecom, power, oil & gas, banking, realty, metal and capital goods while select technology stocks witnessed buying interest due to weakening rupee.

The 50-share NSE Nifty touched an intraday low of 4092.25, before closing the day at 4116.70, down 2.85% or 120.85 points. The 30-share BSE Sensex shed 323.99 points or 2.33%, to settle at 13,589.23.

Marc Faber, Editor and Publisher of The Gloom, Boom & Doom Report, said he saw a correction of 25-30% in equities and that he expected the Sensex to retest 10000-12000 levels. ''Markets will correct as it becomes evident that the economic recovery is not as rapid as expected.''

Among the frontliners, NTPC, Bharti, Reliance Communication, ICICI Bank, Power Grid, SAIL, L&T, DLF, Reliance Power, Reliance Capital, Tata Communication, Tata Motors, Ranbaxy, ABB and BPCL fell 4-9.5%. Reliance Industries, ONGC, ITC, SBI and HDFC Bank fell 2-3%.

The broader indices broke eight days winning streak and declined over 3% each; the BSE Midcap Index was down 166.06 points or 3.4%, to 4,724.09 and the Smallcap Index slipped 3.12% or 180.77 points, to settle at 5,608.66.

Sectoral indices

The BSE Realty Index underperformed other indices, plunged 136.70 points or 3.96%, to 3,314.74. HDIL, Unitech, DLF and Indiabulls Real were down 3.7-10%.

Banking stocks like Kotak Mahindra, ICICI Bank and Axis Bank fell 3.6-7.6%. SBI and HDFC Bank were down 1.4-1.9%. PNB fell 0.77%, which dragged the Bankex 246.11 points or 3.13% lower at 7,605.16.

In the capital goods space, ABB, L&T, Siemens and Punj Lloyd tumbled 2.5-5%. BHEL was down just 0.35%. Respective Index was down 340.85 points or 3.06%, to 10,795.12.

The BSE Power Index tanked 2.97% or 81.45 points, to settle at 2,658.38, as Areva T&D, Power Grid Corp, Reliance Power, NTPC, GVK Power, GMR Infra and Suzlon Energy slipped 2.6-7%.

Auto stocks also lost the road; Ashok Leyland, Tata Motors, Bharat Forge, M&M and Maruti Suzuki were down 1.5-6.9%. The BSE Auto Index fell 2.43% or 107.46 points, to 4,320.12.

Selling was also seen in oil & gas space; wherein BPCL, Cairn India, ONGC, Reliance Industries and Reliance Petroleum fell 2-4%. Respective Index declined 2.42% or 239.50 points, to 9,637.95.

Telecom stocks saw huge sell-off; Reliance Communication lost 9.56%. Tata Communication, Tata Teleservices, Bharti Airtel, Idea Cellular and MTNL fell 3.8-6.6%.

The BSE FMCG Index fell 2.22% or 47.37 points, to 2,089.94, as United Breweries, United Spirits, Ruchi Soya, ITC, Marico and Dabur India declined 2-7.4%.

Pharma stocks like Sun Pharma Advanced, Ranbaxy Labs, Biocon, Wockhardt, Glenmark, Aurobindo Pharma and Cipla fell 1.4-10%, which pushed the Healthcare Index down by 1.58% or 54.77 points, to 3,418.16.

The BSE Metal Index slipped 122.34 points or 1.23%, to settle at 9,809.12, as Jindal Saw, SAIL, NALCO, JSW Steel, Tata Steel and Jindal Steel slipped 2-5.6%.

However, buying was seen in technology stocks. Infosys jumped 2.34% and Wipro gained 1.54%. However, HCL Tech and TCS fell 1-2%.

In the midcap space, Deccan Chronicle, Tulip Telecom, Ballarpur Industries, Edelweiss Capital, Godfrey Phillip, HT Media and Kirloskar Oil plunged 10-12%.

Among the smallcap stocks, Bombay Dyeing, NIIT, Agro Tech Foods, Uflex, Anus Labs and Accel Frontline lost 10-12.6%.

Volumes improved in today's trade compared to previous session and crossed the Rs 1 lakh crore mark again. Total traded turnover stood at Rs 1,03,658.67 crore. This included Rs 19,336.96 crore from NSE cash segment, Rs 77,396.06 crore from NSE F&O and the balance Rs 6,925.65 crore from BSE cash segment.

Market breadth was mixed; about 1395 shares advanced while 1480 shares declined on the BSE. Nearly 251 shares remained unchanged.

Reliance Capital, HDIL, Reliance Industries, Unitech, RNRL, Bharti Airtel and ICICI Bank were most active shares on the bourses.

Global cues

Global markets were witnessing selling pressure. At the time of closing of Indian equities, European markets were trading lower. The FTSE fell 51 points, to 4,313. The CAC was down 58 points, to 3,177 and the DAX declined 67 points, to 4,851.

Among the US futures, the Dow Jones Futures slipped just 26 points, to 8,234 and the Nasdaq futures declined 11.25 points, to 1,349.50.

Asian markets ended on a weak note. Seoul Composite fell 2.06% and Jakarta Composite lost 1.54%. Shanghai Composite, Hang Seng and Taiwan Weighted fell 0.8% each. Straits Times was down 1.26% and Nikkei lost 0.4%.