Sensex Falls Over 600 Points, Nifty Below 17,500; Metals Worst Hit

The Indian equity benchmarks extended losses on Tuesday mirroring losses in other Asian markets. The Sensex fell as much as 686 points and Nifty 50 index tumbled below its important psychological level of 17,500 dragged by losses in heavyweights like Reliance Industries, Infosys, ICICI Bank, Larsen & Toubro, State Bank of India, Bajaj Finance and Tata Steel.

As of 1:43 pm, the Sensex was down 565 points at 58,399 and Nifty 50 index fell 202 points to 17,473.

Asian shares were down while the U.S. dollar held strong on Tuesday, as Treasury yields spiked to a three year high ahead of U.S. inflation data which could foreshadow even more aggressive interest rate hikes from the Federal Reserve.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent, after U.S. stocks ended the previous session with mild losses.

Australian shares were down 0.65 per cent, while Japan's Nikkei stock index slid 1.5 per cent.

Higher U.S. bond yields were supporting the dollar, with the U.S. currency's index measure against six peers moving back over 100 to test last week's near-two year high, news agency Reuters reported.

Technology companies led a broad slide for stocks on Wall Street and bond yields rose again Monday as investors look ahead to the upcoming company earnings reporting season and what it will reveal about the impact inflation is having on corporate profits.

The S&P 500 fell 1.7 per cent, adding to its recent losses. The Dow Jones Industrial Average fell 1.2 per cent and the tech-heavy Nasdaq slid 2.2 per cent. Both the benchmark S&P 500 and the Nasdaq are coming off their first weekly losses in four weeks.

Bond yields rose. The yield on the 10-year Treasury climbed to 2.78 per cent from 2.71 per cent late Friday. Bonds have been rising amid expectations of higher interest rates as the Federal Reserve moves to squelch inflation.

Back home, selling pressure was visible across sectors as all the 15 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty metal index's 2.5 per cent fall. nifty Realty, PSU Bank, Pharma, Healthcare, Media, Consumer Durables, Auto and Bank indices also fell between 0.5-1.9 per cent.

Broader markets also succumbed to the selling pressure and were underperforming their larger peers as nifty Midcap 100 index dropped 1.6 per cent and Nifty Smallcap 100 index declined 1.23 per cent.

Hindalco was top Nifty loser, the stock fell nearly 5 per cent to Rs 549. Coal India, Tata Steel, Tata Motors, JSW Steel, Grasim Industries, Bharat Petroleum, Larsen & Toubro, Hero MotoCorp, Tech Mahindra, Ultratech Cement and Tata Consumer Products also fell between 1.6-4.3 per cent.

On the flipside, TCS was among the notable gainers after it reported a 7.4 per cent year-on-year rise in consolidated net profit at Rs 9,926 crore as against Rs 9,246 crore in the same quarter last year.

Maruti Suzuki, HDFC Life, SBI Life and Kotak Mahindra Bank were also among the gainers.

The overall market breadth was extremely negative as 2,216 shares were declining while 831 were advancing on the BSE.