Mid- and small-cap shares faced intense selling pressure as Nifty Midcap 100 index and Smallcap 100 indices fell over 2 per cent each.
The Indian equity benchmarks fell sharply lower on Friday on the back of weak global markets. Inflation in US rose at the fastest pace in four decades fuelling bets on US interest rates being hiked more aggressively and that led to selloff in emerging markets like India. Rise in bond yields in US leads to flight of money from emerging markets into US bonds, analysts said. The Sensex fell as 1,012 points and Nifty 50 index touched an intraday low of 17,303.
The Sensex dropped 773 points to close at 58,153 and Nifty 50 index tumbled 231 points to close at 17,375.
"We are seeing a sharp cut in the market on the back of a sharp jump in US bond yields due to 4-decade high inflation however most of this fear is already factored in therefore we have to check how the market will negotiate a high-interest environment because we have seen the scenario of rising interest rates and rising equity markets. Technically, Nifty is facing resistance in a cluster of 20-DMA and 100-DMA at 17,600-17,650 while 17,300 is an immediate and important support level while 17,000-16,800 is a critical demand zone. The overall view will remain bullish till Nifty trades above the 16,800 level while there are multiple resistances till 17,800. A breakout of the 17,800 level may lead to a move towards a fresh all-time high," said Santosh Meena, head of research, Swastika Investmart.
Selling pressure was broad-based as all the 15 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty Information Technology index's nearly 3 per cent decline. Nifty PSU Bank, Consumer durables, Realty, Healthcare, Media, Financial Service, Auto and Bank indices also fell between 1-2 per cent.
Mid- and small-cap shares faced intense selling pressure as Nifty Midcap 100 index and Smallcap 100 indices fell over 2 per cent each.
Among the individual shares, Zomato closed 6 per cent lower at Rs 88 after it reported loss of Rs 99 crore in December quarter compared with loss of Rs 388 crore in the same quarter last year.
Grasim Industries was top Nifty loser; the stock dropped 3.4 per cent to close at Rs 1,709. Tech Mahindra, Infosys, UPL, HCL Technologies, State Bank of India, Kotak Mahindra Bank, HDFC, UltraTech Cement, Wipro and Titan also fell between 2-3 per cent.
On the flipside, Indian Oil, IndusInd Bank, Tata Steel, NTPC and BPCL were among the notable gainers.
The overall market breadth was extremely negative as 2,377 shares ended lower while 932 closed higher on the BSE.