The NSE Nifty 50 index ended down 2.6 per cent at 15,774.4 or 427.40 points, its lowest level since July 2021, while the BSE index fell 2.7 per cent or 1,456.74 points to 52,846.7.
All eyes were on inflation data due later in the day. The consumer price index likely slipped modestly in May, but stayed well above the Reserve Bank of India’s upper tolerance limit for a fifth consecutive month.
“The Indian market’s valuations continue to be uninspiring, especially of consumption sectors and ‘quality’ stocks,” said Shrikant Chouhan, head of equity research (retail) at Kotak Securities.
“Financials remain one of the few patches with reasonable valuations, but they too will struggle if India’s macro-economic position was to deteriorate further.”
Global peers were also lower on worries that the Fed would tighten its policy more aggressively after data released last week showed the U.S. consumer price index hit its highest in over 40 years last month.
Under pressure from a strong dollar, the rupee hit a record low of 78.28 to the greenback, while the benchmark 10-year bond yield rose to a more than three-year high of 7.60 per cent as investors dumped emerging market bonds.
Leading sectoral losses in Mumbai trading, information technology stocks on the Nifty dropped 4.1 per cent. Sector heavyweights Infosys Ltd and Tata Consultancy Services fell 3.5 per cent and 4.2 per cent, respectively.
Bajaj Finserv and Bajaj Finance were the top losers on the NSE, declining about 7 per cent and 5 per cent, respectively. The NSE bank index sank 3.1 per cent.