Energy stocks led a broad decline as investors turned highly cautious following the gas price hike deferment coupled with the security situation in oil-rich Iraq, which is witnessing a raging armed insurgency.
Financial, FMCG, metal, realty, infra and technology stocks, too, were impacted by heavy selling.
The 50-share Nifty plummeted by a whopping 76.05 points, or 1.00 per cent to finish at 7,493.20.
Already grappling with uncertainty over monsoon and high inflation, this move by the Narendra Modi Government did not go down well with the market, traders said.
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Squaring-off short positions by traders on account of expiry in the derivative segment further led to volatility.
State-run oil & gas major ONGC was the prominent index loser, slipping 5.84 per cent, while Gail fell 1.6 per cent. Oil marketing firms BPCL, HPCL and IOC dipped 2-4 per cent.
However, Wipro, Tech Mahindra, L&T, HCL-Tech, ITC, Dr Redddy's, Axis Bank, Lupin, Sun Pharma and Power Grid gained.
Turnover in the cash segment was substantially higher due to heavy transaction on the last date for settlement in F&O contracts, and shot-up to Rs 20,805.74 crore from Rs 15,805.74 crore yesterday. A total of 10,957.34 lakh shares changed hands in 75,11,756 trades, while the market capitalisation stood at Rs 86,81,588 crore.