US markets suffer sharp cut on aggravating European concern

US markets suffered sharp cuts on Wednesday with all major indices finishing near session lows, as worries about Europe's deteriorating debt situation continued to sap appetite for risk. There was weak economic news from the domestic front, which too weighed on the sentiments; contracts to purchase previously owned US homes unexpectedly fell in April to a four-month low. The National Association of Realtors reported that the April US pending home sales index fell 5.5% to 95.5, the lowest level since December, from a downwardly revised 101.1 in March. Though, the index for April is elevated from the same time last year, when it sat at 83.5.

However, it was mainly the European concern that stormed the markets after the European Central Bank issued a statement saying it had not been consulted on the bailout for Bankia, Spain's fourth-largest bank, and that such a recapitalization could not be provided by the ECB and eurozone central banks.

The Dow Jones Industrial Average plunged by 160.83 points, or 1.28 percent, at 12,419.86.  The S&P 500 lost 19.10 points, or 1.43 percent, at 1313.32, while the Nasdaq fell by 33.63 points, or 1.17%, to 2837.36.

Indian ADRs closed mostly in red on Wednesday, HDFC Bank was down by 0.46%, ICICI Bank was down by 1.86%, Infosys was down by 0.94%, Wipro was down by 0.26% and Tata Motors was down by 2.30%.