The benchmark indices slumped by around 1% in a volatile session of trade due to the negative triggers from the global front.
The looming fears of a slowdown in China, Fed's signals at its latest policy meet of an impending rate hike and the plunging oil prices rattled the market participants across Asia and Europe, and this had a cascading effect on the bourses back home.
The BSE Sensex oscillated more than 400 points between an intra-day high of 27,964 and a low of 27,564 before ending at 27,607, lower by 323 points or 1.1% and the Nifty settled at 8,371, down 122 points.
Index heavyweights such as Reliance Industries, Tata Steel, Tata Motors, Infosys and SBI bore the brunt of the selling pressure.
The broader markets also had a rough ride, with the BSE Midcap and Smallcap indices shedding 2% each at 11,316 and 11,680 respectively.
The market breadth was weak; out of 2,943 stocks traded on the BSE, there were 777 advancing stocks as against 2,059 declines.
Global scenario
All the Asian markets ended in the red, with the exception of Taiwan.
China's Shanghai Composite shed more than 3% to lead the decline in Asian markets after the International Monetary Fund's latest decision indicated that it won't add the yuan to its basket of reserve currencies for at least a year.
Among other Asian markets, Hang Seng, Kospi and Straits Times lost about 1% each as the pessimistic assessments of China's economy seem to have dampened the prevailing sentiment.
The European indices, including the CAC, FTSE and DAX had also shed 0.5-1% each in early trades. Meanwhile, crude oil prices tumbled to fresh six-year lows on the latest sign of a glut in crude supplies.
Nymex crude lost 4.3% and brent crude lost 3.4% in the last session. And crude-oil futures fell in Asian trade on Thursday after a surprise buildup in U.S. oil stockpiles and persistent oversupply concerns.
On the currency front, the rupee was hovering at 65.39 in late-noon trades as compared to a close of 65.27 on Wednesday.
Sectors and stocks
The metal, banking and IT indices shed more than 2% to top the sectoral losers list on the BSE; the FMCG and pharma space held out amid the general rout.
Metal stocks lost sheen due to softening global commodity prices and concerns over slowing demand from China. Tata Steel, Jindal Steel, Vedants and Hindalco declined by 1-3% each.
The largecap banks such as Axis Bank, ICICI Bank and SBI lost around 2% each, while the midcap banking names such as Kotak Mahindra Bank, Bank of Baroda, Union Bank of India, Bank of India, Punjab National Bank and Canara Bank also corrected by around 5% each.
IT shares, which had rallied in the previous sessions on the back of a weakening rupee, also witnessed profit taking. Infosys, TCS and Wipro ended lower by around 1% each. And index heavyweight RIL lost more than 3%.
Eight stocks – Tata Motors, Oil and Natural Gas Corporation (ONGC), Vedanta, Hindalco Industries, Cairn India, NTPC, NMDC and Gail (India) - from the 50 Nifty companies hit their respective 52-week lows in intra-day trades.
Among the payment bank candidates, Cholamandalam Investment and Finance, Aditya Birla Nuvo, Tech Mahindra and Bharti Airtel surrendered their early gains to end in the red by 1-5% each.
These companies had strengthened by 1-3% in early trades after receiving an 'in principle' approval for setting up payments banks that will provide barebones facilities aimed at covering the vast swathe of population that has no access to financial services. On the other hand, FMCG and pharma were the sole indices to end in the green.
The FMCG index gained more than 1% on the back of stellar gains in ITC.
The FMCG heavyweight surged by more than 3% on reports that Morgan Stanley had upgraded the stock to ‘overweight’ from ‘underweight’ and raised the target price to Rs 400 from Rs 390, citing benign valuations and earnings expectations.
Pharma companies also ended higher for the second straight day after the drug majors Sun Pharma, Lupin and Glenmark Pharma recieved approval from USFDA for new drugs. Lupin, Sun Pharmaceutical Industries and Glenmark Pharma, as also Dr Reddy's gained 1%-4% each, while the midcap pharma names such as Torrent Pharmaceuticals, Strides Arcolab, Aurobindo Pharma, Shasun Pharmaceuticals, Unichem Laboratories, Granules India, Lincoln Pharmaceuticals and Nectar Lifescience touched lifetime highs in intra-day trades.
