Indian benchmark indices slumped in trades on Monday, tracking weak overseas markets. The Sensex plunged 604 points to 28,845 and the 50-share Nifty fell below its important psychological level of 8,800 to close at 8,757, down 181 points.
In point terms, today's fall is the single biggest since January 6, when the Sensex had crashed 850 points.
The selloff in the emerging markets like India came after the US reported better-than-expected jobs data. Falling unemployment signals rising strength in the US economy, but it has led to fears that the Federal Reserve may raise interest rates sooner than previously thought. If interest rates in the US go up, a lot of liquidity is expected to flow into US bonds, which will be negative for emerging markets like India.
Selling pressure was visible across the board. The banking and technology stocks were the worst hit in today's session. The banking sub-index, Bank Nifty, tumbled over 3 per cent on the back of selling in banking stocks like Axis Bank, ICICI Bank, Canara Bank, Yes Bank, HDFC Bank, State Bank of India and Bank of Baroda.
The IT stocks also came under heavy selling after the IT giant Tata Consultancy Services (TCS) said that it continues to see weakness in insurance vertical, while identifying energy and telecom verticals as "problem areas". The company also sounded cautious about its March quarter results.
A muted guidance from the company like TCS indicates that the other IT companies may also face some roadblocks. Reacting to the news, the BSE IT index plunged 2 per cent. Mindtree, Infosys, Tech Mahindra, OFSS, CMC and Wpro ended over 1 per cent lower on the BSE.
Metal, oil & gas, power, realty and auto stocks also succumbed to the selling pressure.
From the Nifty basket, Sesa Sterlite was the top loser, down 6 per cent to Rs 198. Hindalco, GAIL India, NTPC, BHEL, IDFC, Larsen & Toubro, Power Grid, Tech Mahindra and ITC also closed over 3 per cent lower.
On the other hand, Jindal Steel and Power ended 4.6 per cent higher at Rs 194 after the company won the Tara coal mine in the on-going second round of auction.
JSPL won the Tara coal mine with a bid for Rs 126 per tonne for the schedule III, or ready to produce, category mine.
Meanwhile, the mid-cap and small-cap indices ended 1 per cent lower. The overall breadth was negative as 1,887 stocks declined while 979 stocks advanced.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
