The benchmark fell sharply on selling pressure as foreign investors moved to exit their positions before the end of the year. The Sensex sank 241 points, with declines led by realty, and banking stocks. Weak global cues did not support the market either. Asian stock markets fell on Tuesday as an interest rate cut in China disappointed investors and a profit warning from Toyota Motor raised concerns the global recession would only worsen. European stocks also opened flat while US market futures indicated a marginal gain. “I think we have probably seen the worst. Precisely, we are at a crossroad. Some indications like inflation and oil prices are down but we are yet to clear indication of the depth of the recession,” says Jay Moghe, managing partner at Asian Alternative Consulting. In 2009, eyes would be on US housing market and Obama’s stimulus package, he said. He advised investors to stick to defensive and infrastructure sectors till things get more clear. The Sensex fell 2.4 per cent to end at 9,686 while Nifty shed 2,968, off 2.3 per cent. On BSE, the selling pressure in frontline stocks also caught up with the midcaps and smallcaps. The BSE midcap and smallcap indices fell over 2.5 per cent. Selling pressure was seen across all the sectors, with banking, realty and consumer durables the most hit. The banking index on the BSE was down 3.7 per cent, with Kokak Mahindara Bank, Axis Bank and Yes Bank plunging over 6 per cent. In the realty pack DLF fell 4.4 per cent while Unitech was off 7.5 per cent. Among the Sensex stocks, Satyam led the fall, declining over 13 per cent. JP Asso plunged over 10 per cent on concerns of equity dilution after the board approved merger of its subsidiaries in the hotel, cement, real estate and construction businesses. M&M, Sterlite Ind, and Tata Motors fell between 5.3 per cent to 7 per cent. Only RCom among the Sensex stocks managed to close in the green. "There's a lot of profit-taking before the holiday," said Ben Kwong Man Bun, the chief operating officer at KGI Securities in Hong Kong. "People believe the upside will be very limited for now. The global economy is facing a huge problem." South Korea's Kospi retreated 3 per cent, Singapore's benchmark lost 1.2 per cent and Australia's key index fell 0.7 per cent. Japan's market was closed for a national holiday. Hong Kong's Hang Seng Index dropped 2.8 per cent, while Shanghai's main index plummeted 4.6 per cent as both markets came under pressure after Beijing lowered a key interest rate late on Monday. Investors were unimpressed by 0.27 percentage point cut on the benchmark one-year lending rate to 2.25 per cent, its lowest level since February 2004. Many had expected a half-point cut, analysts said. It was the fifth cut in four months as Beijing rushes to revive economic growth.