The benchmark index plunged below the 9K mark in the intraday trade as economic gloom intensified across the world. Japan has been officially declared to be in a recession.
The markets opened positive today on key measures announced by the RBI on Saturday. However, a weak Asian market weighed on the Sensex and it gave up the early gains.
Among the Sensex stocks, Rel Infra, HDFC Bank, and Sterlite Ind shed nearly 6 per cent.
Banking, realty and metal sectors witnessed the heaviest selling.
RBI on Saturday announced measures to improve money market liquidity and help exporters.
The measures include extension of a special repurchase facility to provide liquidity for mutual funds and non-banking finance companies till March 2009, increase in the limit on export credit refinance available to banks, allowing housing finance companies to raise funds through short-term overseas borrowings, reduction in provisioning on standard assets of banks to a uniform level of 0.4%, and reduction in risk weights for banks on commercial real estate and on unrated claims on corporates.