Sensex Tanks 770 Points, Nifty Settles Below 17,600; IT, Financial Stocks Top Drags

New Delhi: The Indian equity benchmarks fell sharply on Thursday to halt a three-day winning run amid selling pressure in information technology and financial stocks. The benchmark BSE Sensex tanked 770 points or 1.29 per cent to close at 58,788, while the broader NSE Nifty plunged 220 points or 1.24 per cent to settle at 17,560.

Asian shares traded weak as Japan's Nikkei index plunged 1.06 per cent and the Shanghai Composite index fell 0.97 per cent. U.S. stock futures were lower after Facebook owner Meta Platforms Inc's shares plunged more than 20 per cent in overnight post-market trade after missing earnings estimates.

Back home, mid- and small-cap shares finished in the negative zone as Nifty Midcap 100 index dropped 0.96 per cent and small-cap shares moved 0.34 per cent lower.

Traders were also concerned after a poll by IHS Markit revealed that India's services sector growth fell to a six-month low in January, owing to constraints imposed by the Omicron wave of Covid-19 infections and rising pricing, said Gaurav Garg, Head of Research, Capitalvia Global Research Ltd.

On the stock-specific front, HDFC was the top Nifty laggard as the stock cracked 3.50 per cent to Rs 2,521.50. ONGC, SBI Life, Grasim Industries and Infosys were also among the laggards.

13 of the 15 sector gauges -- compiled by the NSE -- settled in red. Sub-indices Nifty IT and Nifty Financial Services underperformed the index by falling 2.05 per cent and 1.39 per cent, respectively.

In contrast, Hero MotorCorp, Bajaj Auto, Maruti Suzuki India, Divi's Lab, Maruti Suzuki India and ITC were among the gainers on the NSE index.

On BSE, the overall market breadth stood slightly positive as 1,712 shares advanced while 1,641 declined.

On the 30-share BSE platform, HDFC, Infosys, L&T, Kotak Mahindra Bank, Bajaj Finserv, Tech Mahindra, Bajaj Finance, IndusInd Bank, M&M, Wipro and Reliance Industries attracted the most losses with their shares sliding as much as 3.41 per cent.

Also, shares of Mahindra and Mahindra Financial Services (Mahindra Finance) fell 5.44 per cent to Rs 159.80 after posting weak third-quarter numbers on a sequential basis. Mahindra Finance has a profit of Rs 992 crore for the December 2021 quarter against Rs 1,103 crore posted in the September 2021 quarter.

The indexes had climbed about 4 per cent each over the last three sessions with the Union Budget 2022-23 presentation in focus on February 1.

"The market had been supported by the growth-orient Budget, but we now have to really see what is happening globally. Until the dust settles around interest rates, volatility will stay," Aishvarya Dadheech, a fund manager at Ambit Asset Management in Mumbai, told news agency Reuters.