The 30-share BSE index crashed 1,416 points or 2.61 per cent to close at 52,792. While, the broader NSE Nifty settled 431 points or 2.65 per cent at 15,809.
IT and metal index were the worst hit with Wipro, HCL Tech, Infosys, TCS and Tech Mahindra were the top losers in the sensex pack falling as much as 6.21 per cent.
ITC, Dr Reddy’s and Power Grid were the only stocks that finished in green.
On the NSE platform too all sub-indices finished lower with Nifty IT, Metal, Media falling as much as 5.74 per cent.
Investors lost Rs 6.71 lakh crore in Thursday’s session, with the market capitalisation of all BSE-listed companies falling to Rs 2,49,06,394.08 crore.
In the broader market, the BSE midcap gauge shed 2.66 per cent and the smallcap index declined 2.29 per cent.
All BSE sectoral indices ended lower, with IT tumbling the most at 5.25 per cent, by teck (5.11 per cent), metal (4.23 per cent), telecom (3.46 per cent) and basic materials (2.81 per cent).
As many as 2,482 stocks declined, while 845 advanced and 120 remained unchanged.
Here are the top reasons for today’s fall:
* Weak global cues
Domestic indices tracked weak trends in global markets as investors dumped riskier assets on fears that soaring inflation would hurt corporate earnings and spark an economic slowdown.
Markets globally have also come under pressure from the Russia-Ukraine conflict and the supply chain crisis which has been worsened by China’s zero-Covid policy.
Despite a brief recovery earlier this week, both BSE and NSE have declined nearly 7 per cent so far this month.
“The domestic market has resumed a downtrend taking cues from our global counterparts, US markets specifically,” Ajit Mishra, vice president, research at Religare Broking told news agency Reuters.
He cited the expectations of aggressive monetary policy tightening to combat unruly price pressures as a drag on sentiment.
Barring Shanghai, other Asian markets also ended lower, with Seoul, Hong Kong and Tokyo settling in the red.
Stock markets in the US had ended deep in the red on Wednesday.
“US markets saw the worst sell-off since June 2020 as inflation fear looms,” Mohit Nigam, Head – PMS, Hem Securities told PTI.
*FIIs continue to sell
Continued selling by foreign investors dampened investor sentiments.
Foreign institutional investors offloaded shares worth a net Rs 1,254.64 crore on Wednesday, as per stock exchange data.
“Another main reason for the pessimism can be attributed to relentless selling from the FII camp,” said Prashanth Tapse, vice-president (research), Mehta Equities Ltd told PTI.
* Rubee hits another low
The rupee sinking to another record low against the US dollar added to the woes.
he rupee extended its losses and slumped 10 paise to close at a record low of 77.72 (provisional) against the US dollar on Thursday, weighed down by a negative trend in domestic equities and unabated foreign fund outflows.
At the interbank foreign exchange market, the rupee opened lower at 77.72 against the greenback, and finally settled for the day at 77.72, down 10 paise over its previous close.
“Rupee consolidated in a narrow range despite sharp sell-off in domestic and global equities. Dollar also retraced from higher levels after economic number released from the US came below estimates,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
* Deteriorating macroeconomic sentiments
Concerns over rising inflation that has prompted central banks across the globe to opt for policy rate hikes has spooked investor sentiments.
“Deteriorating macro sentiments such as soaring inflation, recession fears, and the prospect of the Federal Reserve getting even more hawkish will continue to keep benchmarks on the edge.
The Federal Reserve is trying to temper the impact from the highest inflation in four decades by raising interest rates. Many other central banks are on a similar track.
* Wall street route
Stock markets in the US plummeted over 4 per cent on Wednesday after retail giants Target and Walmart came out with subdued numbers, reflecting the continued impact of soaring inflation on consumer spending.
“The recent earnings reported by the US retailers reflected the heat of high retail inflation, resulting in the rout in Wall Street. Persistent offloading by foreign investors along with mounting fears of an economic slowdown wreaked havoc in the domestic market,” Vinod Nair, Head of Research at Geojit Financial Services told PTI.
On Wednesday, the Dow sank more than 1,100 points, or 3.6 per cent. The S&P 500 had its biggest drop in nearly two years, shedding 4 per cent, and the tech-heavy Nasdaq fell 4.7 per cent.
The benchmark index is now down more than 18 per cent from the record high it reached at the beginning of the year. That’s just shy of the 20 per cent decline that’s considered a bear market.
(With inputs from agencies)