The benchmark BSE Sensex fell 390 points on Thursday after heavy selling in banking, finance and capital goods stocks on inflation and growth concerns.
Traders said depreciating rupee and rising crude oil prices also influenced the market sentiment.
The 30-share BSE Sensex ended 390.58 points or 0.68% lower at 57,235.33. Similarly, the broader NSE Nifty ended 109.25 points or 0.64% lower at 17,014.35.
Wipro was the top loser in the Sensex pack, falling 7.03%, followed by twins SBI, L&T, ICICI Bank, Asian Paints, Bajaj Finance and HDFC.
On the other hand, HCL Tech, Sun Pharma, Dr Reddy’s, Reliance Industries and Ultra Tech Cement were the gainers up to 3.19%.
Vinod Nair, Head of Research, Geojit Financial Services, said, “Retail inflation has remained above desired levels which has been a major cause of concern for the Indian economy. With the fall in industrial output in August, it was not well received by the market. As the Indian economy is expected to maintain its resilience.
“In this backdrop, the impending US inflation data, which is projected to remain high, could lead to volatility in global markets.” In Asian markets, shares of Tokyo, Shanghai, Hong Kong and Seoul closed in the red.
However, stock exchanges in Europe were trading with gains in mid-session deals.
Meanwhile, international oil benchmark Brent crude futures rose 0.31% to $92.74 a barrel.
Foreign institutional investors (FIIs) remained net sellers in the Indian capital market on Wednesday as they sold shares worth 542.36 crore, according to exchange data.
The rupee declined by 6 paise to close at 82.39 (provisional) against the US dollar.
In two blows to Indian economic revival, high food prices rise Retail inflation at five-month high of 7.41%Whereas for the first time in 18 months, factory production has fallen.
The rise in consumer price index (CPI)-based inflation for the second consecutive month will put pressure on the Reserve Bank of India (RBI) to raise interest rates again to contain higher prices.