Benchmark share indices ended over 1% down on Thursday dragged by rate-sensitive shares after high May inflation, which remained above the RBI's comfort zone, dashed hopes of a dovish stance by the central bank on key policy rates.
The 30-share Sensex provisionally ended down by 208 points or 1.2% at 16,672 and the S&P CNX Nifty slipped 72 points or 1.4% to close at 5,049.
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(Updated at 14:15hrs)
Key share indices have extended the losses and have reached near day lows led by weakness among rate sensitive shares, after higher-than-expected May WPI inflation data dashed hopes of a rate cut by the central bank.
At 14:15, the 30-share Sensex was down 149 points at 16,732 and the 50-share Nifty was down 51 points at 5,071.
India's wholesale price index (WPI) rose 7.55 percent in May from a year earlier, driven by double-digit rises in food and fuel prices, government data showed on Thursday.
Meanwhile, the country's exports fell 4.16% year-on-year to $25.7 billion in May, a senior trade ministry official told reporters on Thursday, citing provisional data that showed the trade deficit widening over the previous month.
On the global front, Japan's Nikkei share average dipped on Thursday as investors continued to cut their exposure to risky assets, hedging against the potentially disruptive consequences of Greece's election at the weekend and Federal Reserve and G20 meetings next week.
European markets have opened dismal with CAC, DAX and FTSE dipping by almost 1% each.
Back home, on the sectoral front, BSE Capital Goods, Bankex, Power and Realty indices have slumped between 2-3%. Sectors like Consumer Durable, Auto, PSU, Metal, Healthcare and Oil & Gas have tumbled between 0.4-1%. However, BSE FMCG and IT indices have surged by nearly 1% each.
Capital Goods major which had gained last week continued to witness profit taking. L&T is the top Sensex loser, down over 4%. BHEL has slipped over 1%.
Banking and financial shares like ICICI Bank, SBI, HDFC Bank and HDFC have plunged between 1-4% as hopes of a rate cut is unlikely given the high inflation data for May.
Other notable losers include NTPC, Tata Motors, Tata Power, Maruti Suzuki, Dr Reddy’s and GAIL.
On the gaining side, FMCG major ITC is the top Sensex gainer, up over 1%.
Meanwhile, BSE Midcap index has slipped by 0.9% whereas BSE Smallcap index is trading marginally lower.