Sensex falls 300 pts; Rupee moves towards 56/$

The 30-share BSE Sensex fell more than 300 points intraday due to further decline in rupee and European markets. The Indian rupee was moving towards the 56 level, falling 1.09% or 62 paise to 55.94 against the US dollar.

The BSE benchmark lost 292.45 points or 1.7% to 16,866 and the NSE benchmark tanked 92.30 points or 1.77% to 5,112.8.

Country's largest lenders State Bank of India and ICICI Bank tanked 2% each while their rival HDFC Bank was down 1.5%.

Top telecom operator Bharti Airtel and commercial vehicle maker Tata Motors plunged 3% each.

Cigarette major ITC and software services exporter Infosys were down 1.5% each.

Top car maker Maruti Suzuki and steel maker Sterlite Industries crashed more than 5%. Hindalco, GAIL, Tata Steel and BHEL were down 4%

However, drug producers Dr Reddy's Labs and Cipla gained 1% and 0.4%, respectively.

More than three shares declined for every share rising on the National Stock Exchange.

European markets extended fall after two Spanish regions (Valencia and Catalonia) said they would need financial assistance, raising doubts over Spain's ability to avoid sovereign bailout.

FTSE MIB (Italy), Athex Composite (Greece) and IBEX (Spain) crashed 4-4.5%.

Commodities too took huge beating. Brent crude fell by 3.28% to USD 103 a barrel and NYMEX crude lost by 3.35% to USD 88.75 a barrel.