Equity benchmarks lurched lower on Thursday after a four-session winning run, in lockstep with a sharp sell-off in world stocks after minutes of Federal Reserve's recent meeting indicated faster-than-expected rate hikes.
The 30-share BSE Sensex slumped 621.31 points or 1.03 per cent to finish at 59,601.84. Similarly, the broader NSE Nifty plunged 179.35 points or 1 per cent to 17,745.90.
Tech Mahindra was the top laggard in the Sensex pack, shedding 2.56 per cent, followed by UltraTech Cement, Reliance Industries, HCL Tech, HDFC twins, Kotak Bank and Infosys.
In value terms, RIL, HDFC twins and Infosys accounted for over half of the benchmark's losses.
In contrast, IndusInd Bank, Bharti Airtel, Maruti, Bajaj Finance and Titan were among the gainers, rising up to 1.74 per cent.
Only seven of the 30 Sensex counters managed to close in the green.
"Following a sharp fall in western markets, the domestic market witnessed a gap-down opening and extended its losses led by selling in IT, realty and oil & gas shares. Global markets were wounded by heavy selling as Fed meeting minutes pointed to a faster than expected policy rate hike considering elevated US inflation levels.
"Investors are also watching the fast spread of COVID cases and stricter restrictions being imposed as it would keep the market highly volatile in the coming days," said Vinod Nair, Head of Research at Geojit Financial Services.
Ajit Mishra, VP - Research, Religare Broking, said markets may witness further consolidation in the near-term.
"Apart from the global cues and COVID news, the earnings-related updates would keep the volatility high. Traders should continue with a positive yet cautious approach and focus more on sectors/stocks selection," he added.
Sector-wise, BSE realty, IT, energy, teck, finance and healthcare tumbled as much as 1.48 per cent, while telecom, auto, consumer durables and utilities logged gains.
In the broader markets, the BSE midcap index dipped 0.05 per cent, while the smallcap gauge inched up 0.01 per cent.
Wall Street led global markets lower after Fed minutes from its December 14-15 policy meeting showed that policymakers believe the US job market is healthy enough and ultra-low interest rates are no longer needed.
"...quicker than previously anticipated rate hike from the US Fed could witness outflows from the domestic markets and could weigh on sentiments," Reliance Securities said in a research note.
Elsewhere in Asia, bourses in Shanghai, Seoul and Tokyo ended with significant losses, while Hong Kong closed higher.
Stock exchanges in Europe also witnessed intense selling pressure in mid-session deals.
Rupee Falls 11 Paise To Close At 74.49 Against US Dollar
The rupee on Thursday slumped 11 paise to close at 74.49 (provisional) against the US dollar, tracking the strength of the American currency in the overseas market after hawkish US Fed minutes.
Investors saw minutes from the Federal Reserve meeting as a sign that the US central bank might hike interest rates faster than anticipated to cool inflation, and this could lead to outflows from the domestic markets, forex traders said.
According to minutes from the Fed's December 14-15 policy meeting, policymakers believe the US job market is nearly healthy enough and ultra-low interest rates are no longer needed.
At the interbank foreign exchange market, the local currency opened down at 74.44 and witnessed an intra-day high of 74.32 and a low of 74.51 against the US dollar.
The local unit finally settled at 74.49, down 11 paise over its previous close of 74.38.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.05 per cent up at 96.22.
"Dollar gained against most Asian currencies as the market assessed the US Fed's hawkish views. Rupee also felt the heat along with other Asian currencies and depreciated, but the pace was relatively lower as Reliance Industries received good response for their dollar bonds," said Dilip Parmar, Research Analyst, HDFC Securities.
Reliance Industries Ltd, the nation's most valuable company, on Thursday said it has raised USD 4 billion (around Rs 30,000 crore) in debt through the largest ever foreign currency bond issuance by an Indian entity.
Moreover, growing concerns over the Omicron variant of coronavirus and its impact on economic recovery and firm crude oil prices weighed on the local unit.
Meanwhile, Brent crude futures, the global oil benchmark, advanced 0.39 per cent to USD 79.29 per barrel.
On the domestic equity market front, the BSE Sensex ended 621.31 points or 1.03 per cent lower at 59,601.84, while the broader NSE Nifty tanked 179.55 points or 1 per cent to 17,745.90.
Foreign institutional investors remained net buyers in the capital market on Wednesday, as they purchased shares worth Rs 336.83 crore, as per exchange data.
Gold Tumbles Rs 284; Silver Plunges Rs 1,292
Gold price in the national capital on Thursday tumbled Rs 284 to Rs 46,700 per 10 grams in tandem with a decline in international precious metal prices, according to HDFC Securities.
In the previous trade, the precious metal had settled at Rs 46,984 per 10 grams.
Silver also dipped by Rs 1,292 to Rs 59,590 per kilogram from Rs 60,882 per kilogram in the previous trade.
In the international market, gold was trading lower at USD 1,800 per ounce and silver was flat at USD 22.34 per ounce.
"Gold prices traded lower with spot gold prices at COMEX trading half a per cent down at USD 1,800 per ounce on Thursday. Gold prices traded under pressure on hawkish US FED minutes in a view to hike key interest rates sooner-than-expected," according to HDFC Securities, Senior Analyst (Commodities), Tapan Patel.
According to Navneet Damani, VP Commodities Research, Motilal Oswal Financial Services, "Gold prices slipped erasing earlier gains, as US bond yields jumped after minutes from the last Federal Reserve meeting showed an aggressive stance w.r.t the rate hikes this year."