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Mumbai: Equity benchmark Sensex slumped 486 points on Thursday, largely in tandem with a global selloff as rising cases of the COVID-19 Delta variant in multiple countries and hawkish comments from the US Federal Reserve spooked investors.
The 30-share BSE index ended 485.82 points or 0.92 per cent lower at 52,568.94, while the broader NSE Nifty dropped 151.75 points or 0.96 per cent to 15,727.90.
Tata Steel was the top loser in the Sensex pack, skidding 2.30 per cent, followed by Sun Pharma, SBI, ICICI Bank, Dr Reddy's, Kotak Bank and HUL.
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On the other hand, Tech Mahindra, Bajaj Auto, PowerGrid, HCL Tech and NTPC were among the gainers, rising up to 1.32 per cent.
"Pessimistic global cues dented the morale of Dalal Street with selling pressure seen across the sectors amid high volatility. Global markets were deep in the red, shadowing a weakness in the Asian markets following the widening Chinese tech crackdown and concerns over the country's economic recovery.
"As we kickstart Q1FY22 results season, initial releases of IT sector and a good number of lucrative IPOs will be in focus for the coming weeks," said Vinod Nair, Head of Research at Geojit Financial Services.
Binod Modi, Head-Strategy at Reliance Securities, said domestic equities witnessed sharp correction amid weak global cues.
Hong Kong's Hang Seng index corrected by over 2.50 per cent as investors dumped Chinese tech giants led by mounting concerns about regulatory risk, he noted.
Asian stock markets fell after the Federal Reserve talked about possibly reducing US economic stimulus and Japanese officials prepared to declare a coronavirus state of emergency during the Olympics due to a surge in infections, he added.
Sectorally, BSE metal, bankex, basic materials, finance and auto indices fell up to 2.43 per cent, while utilities and power indices ended with gains.
Broader BSE midcap and smallcap indices fell up to 0.37 per cent.
Global investor sentiment was also weighed by the minutes of Federal Reserve's June policy meeting, which showed that the US central bank is mulling tapering its asset purchases as soon as this year.
In rest of Asia, bourses in Shanghai, Seoul and Tokyo too ended with significant losses.
Stock exchanges in Europe were also trading in the red in mid-session deals.
Foreign institutional investors were net buyers in the capital market on Wednesday as they bought shares worth Rs 532.94 crore, as per exchange data.
Rupee Declines By 7 Paise To 74.71; Extends Losses For 3rd Day
Falling for the third day in a row, the rupee weakened further by 9 paise to end at 74.71 against the US currency on Thursday as weaker domestic equities weighed on the forex market sentiment.
The US dollar traded strong against other Asian currencies after the minutes from the last Federal Reserve meeting indicated a tighter monetary policy ahead.
According to the minutes released on Wednesday, Federal Reserve officials discussed tapering in the recent meeting as some members indicated that the economic recovery was proceeding faster.
However, most members agreed that the US economy had yet to meet the substantial further progress benchmark that the central bank has set for any significant change in policy.
Lower crude prices, however, capped the losses in the domestic unit, forex dealers said.
At the interbank foreign exchange market, the rupee opened weak at 74.75 per dollar. It hovered in a range of 74.84 to 74.65 during the session before ending at 74.71 against the greenback.
On Wednesday, the rupee had settled at 74.62 against the US dollar.
On the domestic equity market front, the BSE Sensex ended 485.82 points or 0.92 per cent lower at 52,568.94, while the broader NSE Nifty fell 151.75 points or 0.96 per cent to 15,727.90.
"Indian rupee in line with other Asian currencies traded lower following risk-averse sentiments. Dollar gained after FOMC minutes. US Long duration Treasury yields continued their decline with benchmark 10-year yield falling to 1.27 per cent, symbolic of a market expecting lower inflation, and slower growth, in the future," Dilip Parmar, Research Analyst, HDFC Securities, said.
However, forex market has not followed this move, with the dollar remaining resilient, as traders focus increasingly on the likely timeline for global monetary policy normalisation, he added.
"Back home rupee drifted lower for the third day in row earlier the crude was the reason, but this time risk-aversion was the name of the game as domestic equities lost around a percentage points in today's trade," Parmar said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.18 per cent to 92.47.
Brent crude futures, the global oil benchmark, fell 0.68 per cent to USD 72.93 per barrel.
Foreign institutional investors were net buyers in the capital market on Wednesday as they bought shares worth Rs 532.94 crore, as per exchange data.
Gold Gains Marginally; Silver Declines Rs 902
Gold in the national capital on Thursday was marginally up by Rs 9 to Rs 46,981 per 10 gram with firm global trends and rupee depreciation, according to HDFC Securities.
In the previous trade, the precious metal had closed at Rs 46,972 per 10 grams.
Silver, however, declined Rs 902 to Rs 67,758 per kilogram from Rs 68,660 per kilogram in the previous trade.
The rupee depreciated 17 paise to 74.79 against the US dollar in opening trade on Thursday.
In the international market, gold was trading higher at USD 1,807 per ounce and silver was flat at USD 26 per ounce.
"Gold prices were supported by fall in US treasury yields," according to HDFC Securities, Senior Analyst (Commodities), Tapan Patel.
Navneet Damani, VP Commodities Research, Motilal Oswal Financial Services said, "Gold traded steady hovering above $1,800 as lower US treasury yields countered a stronger dollar.
