Equity benchmarks racked up losses for the fifth straight session on Wednesday as risk sentiment remained fragile after IMF slashed India's growth outlook.
The 30-share BSE Sensex tumbled 135.09 points or 0.36 per cent to close at an over two-month low of 37,847.65. Similarly, the broader NSE Nifty dropped 59.75 points or 0.53 per cent to 11,271.30.
This has been the longest losing streak for the indices since early May. The Sensex has now lost 1,049.81 points, or 2.69 per cent, in five sessions, while the Nifty has shed 325.60 points or 2.80 per cent.
With the markets already grappling with unabated foreign fund outflows and tepid corporate earnings, IMF's downward revision of India's economic outlook further hit domestic investor sentiment, traders said.
The IMF on Tuesday projected a slower growth rate for India in 2019 and 2020, slashing its forecast by 0.3 percentage points for both years at 7 per cent and 7.2 per cent respectively, reflecting a weaker-than expected outlook for domestic demand.
Top losers in the Sensex pack on Wednesday included IndusInd Bank, Bajaj Finance, Tata Motors, Tata Steel, Hero MotoCorp, Axis Bank, M&M, Vedanta and Maruti, falling up to 3.50 per cent.
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On the other hand, Asian Paints was the biggest gainer, rallying 3.42 per cent, after the company reported an 18 per cent increase in consolidated net profit for the June quarter.
HUL, HDFC twins, HCL Tech and ITC too ended in the green, spurting up to 2.06 per cent.
"Investors turned sellers on concerns that economy is moving through a slowdown phase. IMF lowered GDP growth forecast by 30 bps for 2019 based on weak domestic demand outlook which fuelled a sell off in a market where sentiment is already hurt due to tax concerns.
"Mixed Q1FY20 results, outflow of foreign funds and weakening rupee to weigh on investor sentiments going ahead," said Vinod Nair, Head of Research, Geojit Financial Services.
Sectorally, the BSE metal, auto, basic materials, oil and gas, industrials, realty, telecom, power and energy indices fell up to 2.48 per cent.
FMCG was the sole gainer, adding 0.17 per cent.
The broader BSE midcap and smallcap indices plunged up to 1.48 per cent.
On a net basis, foreign institutional investors sold equities worth Rs 2,607.97 crore on Tuesday, while domestic institutional investors purchased shares to the tune of Rs 2,625.10 crore, provisional data available with stock exchanges showed.
Global markets were mixed as participants digested a slew of corporate results and macro data.
In Asia, Shanghai Composite Index, Hang Seng and Nikkei ended higher, while Kospi settled in the red. Bourses in Europe were trading on a mixed note in their early sessions.
On the currency front, the Indian rupee depreciated marginally to 68.99 against the US dollar (intra-day).
Meanwhile, the global oil benchmark Brent crude futures rose 0.22 per cent to USD 63.97 per barrel.