MUMBAI:  Heavy selling by foreign investors on the back of the minimum alternate tax (MAT) dispute, free falling rupee value and disappointing fourth quarter results led to a benchmark index of the Indian equities market closing Tuesday's trade down 630 points or more than two percent.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed the day's trade deep in the red. It closed 198.30 points or 2.38 percent down at 8,126.95 points.

The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 27,502.91 points, closed the day's trade at 26,877.48 points, down 629.82 points or 2.29 percent from the previous day's close at 27,507.30 points.

The Sensex touched a high of 27,502.91 points and a low of 26,837.39 points in the intra-day trade.

Out of 2,803 companies whose shares are traded on the BSE, stocks of 1,962 firms declined while only stocks of 746 companies advanced in the day's trade. The scrip of 95 companies remained unchanged.

"The markets have fallen due to a combination of factors such as the falling rupee value, FIIs turning into net sellers, uncertainty over the U.S. interest rate hike, higher commodity prices like crude oil, and increase in U.S. 10-year bond yields," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.

The MAT on capital gains is expected to impact the margins of foreign funds. This has hit their investment appetite for the Indian equities' market.

According to data with the National Securities Depository Limited (NSDL), the Foreign Portfolio Investors (FPIs) had turned into net sellers in the Indian equities markets. They off-loaded shares worth 354.75 crore or $55.39 million.