Key stock market indices Sensex and Nifty declined for a third straight day on Thursday due to heavy selling in banking, financials and infra stocks following global inflationary concerns and foreign fund outflows.
The equity benchmark Sensex tumbled by 433.13 points or 0.72 per cent to close at 59,919.69 points as 24 of its scrips declined. The index had opened lower and later touched a day's low of 59,656.26 points as banking giants SBI and ICICI Bank and HDFC took a beating.
The 50-issue Nifty of the National Stock Exchange declined by 143.60 points or 0.80 per cent to end at 17,873.60 points. As many as 41 of its stocks declined.
"Global inflationary pressure following upsetting US inflation data forced the domestic market to trade with deep cuts," Vinod Nair, Head of Research at Geojit Financial Services said.
Beating the market estimates, the US inflation hit a 30-year high level of 6.2 per cent YoY adding fears of an earlier than expected rate hike, while the US bond yields shot higher.
"Rising inflationary pressure along with prospects of an early rate hike can keep the domestic market on edge as such indicators tempt foreign investors to pump out liquidity from emerging markets like India," Nair explained.
Among Sensex stocks, SBI fell the most by 2.83 per cent. ICICI declined by 1.09 per cent while housing finance major HDFC dropped 1.31 per cent.
Financial stocks Bajaj Finserv and Bajaj Finance and private banks HDFC Bank, Kotak Bank, and Axis Bank also declined. Tech Mahindra, Sun Pharma, Asian Paints, PowerGrid and HUL were among major losers.
On the other hand, Titan, M&M, Reliance Industries and TCS advanced.
Sectorally, BSE realty, healthcare, bankex, finance, telecom and auto indices fell up to 2.51 per cent while consumer durables, power, metal, utilities and energy indices rose up to 0.68 per cent.
Broader midcap and smallcap indices fell up to 0.64 per cent.
"Weak global cues led by rising CPI in the US spooked markets as fears of the Fed being behind the curve seem to worry the street. Back home most of the sectoral indices traded weak today but it is interesting to note that even on a weak day the street did reward companies with a positive earnings surprise, a key feature witnessed during the second-quarter earnings season," S Ranganathan, Head of Research at LKP securities said.
Defence stocks saw good investor interest given the size of the opportunity in the 'Atmanirbhar Bharat' Theme', he said.
Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi said, "Indian markets opened on a negative note following mixed Asian market cues and higher than expected inflation data reported in U.S. Raising concerns of an earlier-than-expected hike in interest rates in the world's largest economy."
Also, continuous foreign fund outflows subdued traders' sentiments. Foreign institutional investors (FIIs) were stood as net sellers in the capital market, as they offloaded shares worth Rs 469.50 crore on Wednesday. They have sold equities worth Rs 5,515 crore so far this month.
The market witnessed some corrections after Nifty failed to sustain the level of 18000 in the market. "Market suggests that 17600-17800 will act as a support zone in the market. If the market is able to sustain these levels, it can witness a bounce back and Shift in momentum. Technical indicators suggest a volatile movement in the market," Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research said.
Elsewhere in Asia, bourses rebounded in Shanghai, Hong Kong and Tokyo ended with gains, while Seoul was in the red.
Major indices in Europe were trading on a positive note in mid-session deals.
Meanwhile, international oil benchmark Brent crude rose 0.63 per cent to USD 83.16 per
The US dollar soared to a 16-month high in global markets as stocks and bonds declined after the US inflation data.