Selling pressure was broad-based as all the 15 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty PSU Bank index's 3.4 per cent drop.
The Indian equity benchmarks nosedived on Monday on the back of weak global markets on concerns that Russia could invade Ukraine. The fears of Russian invasion sent oil prices to seven-year highs and a selloff in risk assets like equities. The Sensex fell as much as 1,676 points and Nifty 50 index dropped below its important psychological level of 16,900.
As of 2:47 pm, the Sensex was down 1,616 points or 2.8 per cent at 56,536 and Nifty 50 index dropped 509 points or 2.9 per cent to 16,866.
The United States on Sunday said Russia might create a surprise pretext for an attack, as it reaffirmed a pledge to defend "every inch" of NATO territory, news agency Reuters reported.
Global markets were jittery before the geo-political tensions between Ukraine and Russia esclated as inflation in US jumped to four-decade high raising speculation that US Fed might raise rates at a faster pace than anticipated.
“The volatility has gone up with the increase in uncertainty over tensions between Russia and Ukraine. The market is under downward pressure due to the looming threat of war. It is likely to have a short-term impact since the risk of actual elongated war between two nuclear powers is quite limited. It is expected that the tensions will get dissipated through geopolitical manoeuvres over next few weeks, but market volatility will be high during this period,” said Mohit Ralhan, managing partner at TIW Captial Group.
Back home, selling pressure was broad-based as all the 15 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty PSU Bank index's 3.4 per cent drop. Nifty Bank, Financial Services, Auto, FMCG, Media, Metal, Private Bank, Realty and Consumer Durable indices tumbled between 2-3 per cent.
Mid- and small-cap shares were also facing selling pressure as Nifty Midcap 100 and Nifty Smallcap 100 indices dropped over 2 per cent each.
JSW Steel was top Nifty loser, the stock fell over 5 per cent to Rs 636. HDFC Life, HDFC, Tata Steel, IndusInd Bank, State Bank of India, Tata Motors, ICICI Bank, Shree Cements, Ultratech Cement, Bharti Airtel and Grasim Industries also fell between 3-4.5 per cent.
On the flipside, Tata Consultancy Services rose 2.35 per cent to Rs 3,781 after the company fixed February 23 as record date for buyback of shares.
ONGC also rose over 1.5 per cent.
The overall market breadth was extremely negative as 2,688 shares were declining while 569 were advancing on the BSE.