Shares came under renewed selling amid investor concern over lacklustre domestic industrial output data and US rate hike fears as the benchmark Nifty tanked by a hefty 64 points on the National Stock Exchange (NSE) despite a significant fall in inflation numbers.
Uncertainly surrounding the outcome of US Fed meeting on Wednesday and across-the-board profit booking due to fears of withdrawal of funds from emerging markets by FIIs spooked the market, leading the 50-issue index to hit multi-week lows.
With the world's largest economy showing signs of a strong recovery, the risk of an earlier-than-expected interest rate hike by the US central bank looms large over markets.
Metal shares were among the biggest laggards followed by FMCG, energy, technology, financial and auto. However, the broader markets outperformed benchmarks with mid and small-cap shares gaining smartly.
Meanwhile, the index of industrial production (IIP) slipped to a four-month low of 0.5 per cent in July, while the wholesale inflation dropped sharply to 3.74 per cent in August, nearly a five-year low, even as consumer price index (CPI) for August came in at 7.8 per cent as against 7.96 per cent in the previous month.
After a gap-down opening, the key index maintained its downward trend throughout the session.
The Nifty plummeted by 63.50 points, or 0.78 per cent, to end at 8,042 after hitting an intra-day low of 8,030.
Equities elsewhere in Asia also ended lower on concerns over sluggish Chinese industrial output data amid caution ahead of Fed policy outcome.
The CNX metal index, which tumbled 1.60 per cent, was among the day's worst-performing sectoral indices spooked by bearish Chinese data with heavyweights such as Hindalco, Tata Steel and Sesa Sterlite falling sharply.
TCS, HDFC, Reliance, ITC, ONGC, L&T, Infosys, ICICI Bank, Tata Motors, M&M, Sun Pharma, Kotak Bank, Axis Bank, Wipro, Asian Paints, Coal India, NTPC and IndusInd Bank were the key losers.
Healthercare stocks, however, withstood the selling frenzy with Lupin, Cipla and Dr Reddy's gaining between 1 to 4 per cent. Other notable gainers included United Spirits, Hero Moto, Tech Mahindra, PNB, Cairn and Bank of Baroda.
Turnover in the cash segment fell to Rs 15,971.77 crore from Rs 17,279.12 crore last Friday. A total of 10,500.22 lakh shares changed hands in 76,46,767 trades, while market capitalisation stood at Rs 93,78,543 crore.
