The Indian equity benchmarks extended losses after staging a gap down opening on Friday with Sensex falling as much as 1,011 points and Nifty dropping below its important psychological level of 17,350 amid weak global cues. Asian share markets fell on Friday, after red-hot U.S. inflation data and hawkish comments from a Federal Reserve official fuelled bets on U.S. interest rates being hiked more aggressively, and sent U.S. Treasury yields jumping.
As of 10:27 am, the Sensex was down 865 points at 58,060 and Nifty 50 index fell 263 points to 17,342.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.76 per cent, with most markets in the red, though a resurgence in property stocks helped greater China markets. Japanese markets were closed for a holiday, news agency Reuters reported.
Overnight, major global stock indexes fell on Thursday under pressure from crucial U.S. inflation data, falling technology shares and rising benchmark bond yields.
U.S. consumer prices rose solidly in January, leading to the biggest annual increase in inflation in 40 years, which could fuel financial market speculation for a 50 basis points interest rate hike from the Federal Reserve next month.
Back home, selling pressure was broad based as all the 15 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty IT index's nearly 3 per cent decline. Nifty Consumer Durables, Healthcare, Realty, Pharma, FMCG, Financial Services, and Bank indices also fell around 1 per cent each.
"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.
Mid- and small-cap shares were also facing selling pressure as Nifty Midcap 100 and Nifty Smallcap 1000 indices fell 0.7 per cent each.
Among the individual shares, food delivery service provider, Zomato, fell as much as 6 per cent to Rs 89 after it reported net 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 fell 3.5 per cent to Rs 1,706. Infosys, Tech Mahindra, Britannia Industries, Nestle India, Wipro, Bajaj Finance, Larsen & Toubro, Titan, HDFC and Shree Cement also fell between 2-2.8 per cent.
On the flipside, Indian Oil, Maruti Suzuki, Bharat Petroleum and Divi's Labs were among the notable gainers.
The overall market breadth was extremely negative as 2,274 shares were declining while 809 were advancing on the BSE.
