The BSE benchmark Sensex today fell by a staggering 298.07 points to close at its lowest level in nearly two months, mainly led by drop in interest rate sensitive stocks as rupee slumped to new lows dashing hopes of a rate cut by RBI next week.

Also, Jindal Steel logged the day's biggest loss as Naveen Jindal and the company were named as accused in the fresh FIR filed by CBI in connection with the coal allocation scam.

The 30-share index started the day on a weak note and continued its downward march throughout the day as rupee kept tumbling. It settled 298.07 points lower, or 1.53 per cent, at 19,143, a level last seen on April 22.

Similarly, the broad-based National Stock Exchange index Nifty plunged below the crucial 5,800 level by falling 89.20 points, or 1.52 per cent, to close at 5,788.80.
Also, MCX-SX flagship index, SX40, ended 165.35 points lower, or 1.43 per cent, at 11,367.34.

Brokers said the steepest two-day fall in rupee's value to all-time low of 58.96 may limit the Reserve Bank's scope to lower interest rates at its policy review on June 17.
They said the currency debacle might put pressure and hike essential item prices such as crude oil and further widen fiscal deficit.

The trading sentiment was further dampened on weakening global trend, after Bank of Japan refrained from expending stimulus and treasury yields, they added.
Out of the 30 BSE index components, 24 stocks declined led by Jindal Steel and Power, by plunging 15.18 per cent to Rs 226.35, a steepest fall in five years after the CBI said it has registered a case against the company in coal allocation scam.

Sectorally, the consumer durable index suffered the most, losing 6.36 per cent to 6,770.66, followed by metal index that settled 4.13 per cent lower at 7,976.08.
Bucking the trend, stocks of Bajaj Auto, Wipro, GAIL and Cipla climbed, while NTPC remained unchanged.