Key Indian equity indices tumbled for the seventh consecutive session and closed deep in the red on Wednesday, as caution ahead of futures and options (F&O) expiry, coupled with a weak rupee and profit booking in banking, capital goods and automobile stocks, hampered investors' risk-taking appetite.
According to market observers, the seven-day fall was the longest losing streak for the indices after a nine-day fall that occurred during December 13-26, 2016.
Besides, a sell-off was triggered in the key indices on updates that the Indian Army inflicted "heavy casualties" on NSCN (K) militants during a firefight along the border with Myanmar.
The 30-scrip Sensitive Index of the BSE shed over 400 points to close at 31,159.81 points -- down 439.95 points, or 1.39 per cent.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) closed below the psychologically important 9,800-level.
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It fell by 135.75 points or 1.38 per cent, to close at 9,735.75 points.
"Markets ended sharply lower on Wednesday on the back of a huge sell-off. It was the seventh consecutive session of losses for the Nifty," Deepak Jasani, Head - Retail Research, HDFC Securities told IANS.
"The Sensex hit its lowest level in almost three months. The Nifty hit almost a seven-week low," said Jasani.
In terms of the broader markets, the S&P BSE mid-cap index slipped by 1.99 per cent and the small-cap index by 2.10 per cent.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the benchmark indices fell over one per cent, as the rupee sunk to a more than six-month low on foreign fund outflows.
"Sentiment was also dampened, when a news agency flashed that there was a firefight and heavy casualties were suffered by the NSCN-Khaplang in Nagaland along the India-Myanmar border, tweeted the Eastern Command," Desai told IANS.
On the currency front, the rupee weakened by 26-27 paise to close at 65.71-72 against the US dollar from its last week's close at 65.45
Jasani added: "Federal Reserve Chairperson Janet Yellen hinting at possible hike in US interest rates also increased worries of pull out of money from risky assets in emerging markets like India."
In terms of investments, provisional data with the exchanges showed that foreign institutional investors (FIIs) sold scrips worth Rs 856.28 crore while domestic institutional investors (DIIs) purchased stocks worth Rs 1,858.29 crore.
"Foreign investors have net sold $777 million worth of Indian shares so far this month. They sold nearly $2 billion worth of equities in August as stretched valuations and simmering North Korea tensions saw foreign investors pulling out," added Desai.
All the 19 sub-indices of the BSE closed in the red. The S&P BSE banking index dipped by 453.97 points, capital goods index by 377.30 points, and automobile index by 377.01 points.
Major Sensex gainers on Wednesday were: Tata Consultancy Services, up 0.62 per cent at Rs 2490.15; and Coal India, up 0.25 per cent at Rs 260.95.
Major Sensex losers were: Adani Ports, down 4.85 per cent at Rs 371.60; State Bank of India, down 2.89 per cent at Rs 250.45; Reliance Industries, down 2.51 per cent at Rs 798.60; Dr. Reddy's Lab, down 2.50 per cent at Rs 2,307.50; and Sun Pharma, down 2.46 per cent at Rs 494.95.
--IANS
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