The Indian equity benchmarks ended sharply lower on Friday as global equity markets plunged on fears of contagion after liquidity crisis emerged at the US-based technology start-up lender Silicon Valley Bank.
Silicon Valley Bank had sought to reassure tech clients as its stock collapsed by 60 per cent while it was attempting to raise funds to plug a $1.8 billion hole caused by the sale of a loss-making bond portfolio, news agency Reuters reported.
The news compounded jitters from news that crypto-focused lender Silvergate was closing down.
Silicon Valley Bank raised questions over the unrealised losses on bond portfolios among US banks, and what that could mean for capital requirements, Reuters report added quoting analysts.
Back home, mirroring losses in global markets, Sensex fell as much as 921 points and Nifty 50 index touched an intraday low of 17,324.
The Sensex closed 671 points lower at 59,135 and Nifty 50 index dropped 177 points to 17,413.
"Domestic indices extended losses for second consecutive day in line with sell off in global markets triggered by 60 per cent fall in US based Silicon Valley Banks. Nifty opened with deep cuts and remained in negative territory to close with loss of 177 points (-1 per cent) at 17413 levels. All sectors ended in red with major selling seen in banking stocks. Fall in the select US banks added to the overall Global uncertainty regarding the quantum of the next Fed rate hike," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services
Selling pressure was broad-based as 13 of fifteen sector gauges compiled by the National Stock Exchange ended lower led by the Nifty Bank index's 1.8 per cent fall. Nifty Financial Services, Media, PSU Bank, Private Bank, Realty and Metal indices also fell between 1-2 per cent.
On the other hand, select FMCG and consumer durable stocks closed higher.
Mid- and small-cap shares also faced selling pressure as Nifty Midcap 100 index declined 0.75 per cent and Nifty Smallcap 100 index tumbled 0.9 per cent.
Adani Enterprises was top Nifty loser, the stock dropped 3 per cent to close at Rs 1,894. HDFC Bank, Apollo Hospitals, HDFC, IndusInd Bank, State Bank of India, Axis Bank, Bajaj Finserv, Mahindra & Mahindra, ICICI Bank and Larsen & Toubro also fell between 1.5-2.6 per cent.
On the flipside, Tata Motors was top Nifty gainer, the stock advanced 1 per cent to close at Rs 437.
NTPC, Maruti Suzuki, Britannia Industries, Power Grid, Titan and Adani Ports were among the gainers.
The overall market breadth was negative as 2,099 shares ended lower while 1,407 closed higher on the BSE.