A depreciating rupee and weekly expiry of index futures and option contracts added to the gloom in Thursday's session, traders said
The Indian equity benchmarks nosedived on Thursday as investors booked profits amid weak global cues after the US Federal Reserve increased the interest rate and signaled more hikes in its fight against inflation, which has been at four-decade highs. The Sensex dropped as much as 962 points and Nifty 50 index touched an intraday low of 18,387.70.
The Sensex dropped 879 points to close at 61,799 and Nifty 50 index fell 245 points to settle at 18,415.
A depreciating rupee and weekly expiry of index futures and option contracts added to the gloom in Thursday's session, traders said.
The Federal Reserve reinforced its inflation fight Wednesday by raising its key interest rate for the seventh time this year and signaling more hikes to come. But it announced a smaller hike than it had in its past four meetings at a time when inflation is showing signs of easing.
The Fed made clear, in a statement and a news conference by Chair Jerome Powell, that it thinks sharply higher rates are still needed to fully tame the worst inflation bout to strike the economy in four decades.
The central bank boosted its benchmark rate a half-point to a range of 4.25 per cent to 4.5 per cent, its highest level in 15 years. Though lower than its previous three-quarter-point hikes, the latest move will further increase the costs of many consumer and business loans and the risk of a recession.
Back home, selling pressure was broad-based as all the 15 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty IT and Media indexes' over 2 per cent fall. Metal, PSU Bank, Private Bank, Metal, Financial Services and Bank indices also dropped between 1-2 per cent.
Mid- and small-cap shares also faced selling pressure as Nifty Midcap 100 index declined 1 per cent and Nifty Smallcap 100 index declined 0.6 per cent.
Among the individual shares, IRCTC fell more than 5 per cent in morning trade on the BSE on Thursday as the sale of the government's up to 5 per cent stake in the company kicked off.
The government's offer-for-sale (OFS) of up to 5 per cent stake in Indian Railway Catering and Tourism Corporation (IRCTC) at a floor price of Rs 680 a share opened for institutional investors on Thursday.
Tech Mahindra was top Nifty loser, the stock fell 3.8 per cent to Rs 1,024. Titan, Infosys, Grasim Industries, Eicher Motors, HDFC, Asian Paints, HDFC Bank, ITC, Tata Steel also fell between 2-2.7 per cent.
On the other hand, Britannia Industries, Hero MotoCorp, NTPC, SBI Life and Sun Pharma were among the notable gainers.
The overall market breadth was negative as 2,227 shares ended lower while 1,325 closed higher on the BSE.