The key equity indices further extended losses in mid-morning trade amid weak global cues. The Nifty was trading below the 16,600 mark. Auto stocks extended losses for the third consecutive session.
At 11:26 IST, the barometer index, the S&P BSE Sensex, was down 1306.42 points or 2.29% to 55,705.32. The Nifty 50 index lost 391.15 points or 2.30% to 16,594.05.
In the broader market, the S&P BSE Mid-Cap index slipped 3.13% while the S&P BSE Small-Cap index shed 2.97%.
The market breadth was weak. On the BSE, 633 shares rose and 2650 shares fell. A total of 130 shares were unchanged.
The US Dow Jones futures were down 310 points, indicating a weak opening in US stocks today.
The sentiment was affected by the rapidly spreading coronavirus variant in most parts of Europe. Traders worried that fresh round of lockdowns could hurt the economic recovery prospects.
Unabated selling by FIIs in India, concerns about the rising inflation and hawkish tone by the world's major central banks also triggered selling pressure.
The US central bank on 15 December announced that it would put an end to its pandemic-era bond purchases in March and would raise the interest rates thrice in the upcoming year to battle growing inflation.
The Bank of England on 16 December raised interest rates and warned inflation was likely to hit 6% in April - three times its target level. The BoE cut its growth forecasts for December and the first quarter of 2022 because of the spread of Omicron.
However, the Bank of Japan on 17 December maintained its target for short-term interest rates at minus 0.1% and said it would continue guiding the yield on 10-year Japanese government bonds to around zero.
Buzzing Index:
The Nifty Auto index fell 3.29% to 10,327. The index has lost 6.34% in three sessions.
Hero MotoCorp (down 4.44%), Bharat Forge (down 4.22%), Mahindra & Mahindra (down 4.03%), Tata Motors (down 4.02%) and Bajaj Auto (down 3.60%) declined.
Further, Eicher Motors (down 3.17%), Ashok Leyland (down 2.68%), Maruti Suzuki (down 2.01%) and TVS Motor Company (down 1.83%) edged lower.
Global Markets:
Asian stocks tumbled on Monday. China has slashed its benchmark lending rate for the first time in more than one-and-a-half years.
China on Monday announced a cut in its one-year loan prime rate from 3.85% to 3.8% the first such move since April 2020.
Wall Street finished lower on Friday, weighed down by Big Tech as investors worried about the omicron coronavirus variant and digested the Federal Reserve's decision to end its pandemic-era stimulus faster.
In Europe, the Netherlands went into lockdown from Sunday till at least January 14 amid fears that its healthcare system "will become overburdened in January." Elsewhere, Britain has also been seeing a surge in covid infections.
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