The Indian equity benchmarks erased intraday gain in noon deals on the back of profit booking ahead of weekly expiry of index futures and option contracts. The Sensex fell as much as 428 points from the day's highest level and Nifty 50 index dropped below its important psychological level of 15,950 after hitting an intraday high of 16,071. Tata Consultancy Services, Axis Bank, Hindustan Unilever, ITC, State Bank of India, ICICI Bank and HCL Technologies were among the top drags on the Sensex.
As of 12:17 pm, the Sensex fell 6 points to 53,508 and Nifty 50 index declined 17 points to 15,961.
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Asian shares struggled on Thursday and the safe haven dollar was strong as white hot U.S. inflation data drove fear the Federal Reserve will raise interest rates even more aggressively to slow price increases, potentially sending the economy into recession.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.1 per cent, hovering just above the two-year low hit on Tuesday, while U.S. Nasdaq futures shed 0.3 per cent.
Most of the Asian markets were trading higher. Japan's Nikkei rose 0.87 per cent, Hong Kong's Hang Seng advanced 0.19 per cent, South Korea's KOSPI fell 0.2 per cent and Taiwan Weighted rose 0.3 per cent.
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Overnight, stocks capped another shaky day on Wall Street with more losses Wednesday, after a highly anticipated report on inflation turned out to be even worse than expected.
The S&P 500 ended 0.4 per cent lower, its fourth consecutive drop, after tumbling as much as 1.6 per cent earlier. The Dow Jones Industrial Average fell 0.7 per cent, while the Nasdaq composite dropped 0.2 per cent, erasing nearly all of an early 2.1 per cent loss.
Back home, buying was visible across sectors as twelve of 15 sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty Healthcare index's 1.2 per cent gain. Nifty Pharma, Auto, Financial Services, FMCG, Private Bank, Consumer Durables and Oil & Gas indices also rose between 0.4-1 per cent.
On the other hand, IT, PSU Bank and Metal stocks were facing selling pressure.
Mid- and small-cap shares were trading mixed as Nifty Midcap 100 index rose 0.16 per cent while Nifty Smallcap 100 index fell 0.3 per cent.
Apollo Hospital was top Nifty gainer, the stock rose 2.2 per cent to Rs 3,952. Tata Consumer Products, Mahindra & Mahindra, Britannia Industries, Dr Reddy's Labs, Sun Pharma, Bajaj Finserv, Cipla and HDFC also rose between 1-2 per cent.
On the flipside, UPL, JSW Steel, Axis Bank, Tata Steel, Tech Mahindra, State Bank of India, HDFC Life and Grasim were among the losers.
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The overall market breadth was positive as 1,525 shares were advancing while 1,079 were declining on the BSE.
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