Mumbai: The Sensex on Monday dropped by 281 points to nearly one-month low of 16,877.35 as global markets roiled in debt problems resurfacing in Spain over the weekend.
Global stocks crashed after reports said Spain's Murcia region could apply to access government's funds within days of another region, Valencia, planning to take the same route.
Later in the day, Bank of Spain said its economy contracted by 0.4 percent in April-June period, after slumping by 0.3 percent in January-March period.
After opening lower, the BSE benchmark index closed with a loss of 281.09 points, or 1.64 per cent, to end below the 17,000 mark as all sectoral indices, led by metal and realty, suffered losses.
Out of the 30-share Sensex, 28 stocks led by Maruti and Sterlite that lost over 5.5 percent each, closed lower as across-the-board selling was seen. Private banks HDFC Bank and ICICI bank shed nearly 2 percent each while ITC, Infosys and RIL lost around one percent each.     Metal stocks, including Hindalco and Tata Steel, also ended lower on reports that the Chinese economy -- the biggest consumer of metals -- may slow further in third quarter.
"The selling pressure was triggered following the weakness in the global markets induced by renewed economic worries related to Spain," said Nidhi Sarswat, Senior, Research Analyst, Bonanza Portfolio.
The 50-share National Stock Exchange index Nifty lost 87.15 points, or 1.67 per cent to 5,117.95.
Key Asian benchmark indices in Japan, Hong Kong and China closed with losses in the 2-3 per cent range while European markets, including France, Germany and the UK, were trading with sharp losses of 2 percent in afternoon deals.
The global risk sentiment hit currency markets as well with rupee nearing the 56-level against the US dollar.


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