Benchmark indices spiralled lower for the second straight session Thursday as investors fretted over the fiscal impact of the government's proposed farm package while a rare cut in revenue forecast by Apple took its toll on global equities.
The 30-share BSE Sensex tumbled 377.81 points, or 1.05 per cent, to end at 35,513.71. The broader NSE Nifty plunged 120.25 points, or 1.11 per cent, to 10,672.25.
Asian and European markets tripped following a sudden sell-off on Wall Street after Apple cut its revenue forecast for the first time in nearly 12 years, highlighting risks to corporate earnings amid slowing global growth.
Investor sentiment also turned choppy after the White House meeting between US President Donald Trump and top Congressional leaders on resolving the ongoing partial government shutdown ended in a stalemate Wednesday.
The biggest losers in the Sensex pack were M&M, ONGC, Vedanta, Tata Steel, L&T, HDFC, NTPC and Axis Bank, falling up to 3.04 per cent.
The gainers included HCL Tech, Bajaj Auto, HUL and Asian Paints, rising up to 0.50 per cent.
Sectorally, auto, pharma and metal indices took the worst hit, falling over 2 per cent.
Trading mood was subdued after reports said the government was contemplating direct transfers worth Rs 4,000 an acre per season for farmers, among other incentives, which will likely have a substantial financial implication on the exchequer.
Investors also remained on the sidelines ahead of the corporate earnings scheduled to begin next week, traders said, adding that heavy selling by foreign as well as domestic funds weighed on local equities.
According to Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas, with general elections around the corner, one can expect the volatility in the Indian markets to continue.
"The auto sector remained in the limelight as growth for December 2018 remained sluggish. This was the second consecutive month of subdued performance by the industry. Weak consumer sentiments due to mandatory insurance costs and increased lending rates continued to impact demand," he added.
On a net basis, foreign portfolio investors (FPIs) sold shares worth Rs 621.06 crore Wednesday, while domestic institutional investors (DIIs) were net sellers to the tune of Rs 226.18 crore, provisional data available with BSE showed.
Meanwhile, the rupee was trading marginally weaker against the US dollar at 70.26.
Brent crude futures dropped 0.15 per cent to USD 54.83 per barrel.
Elsewhere in Asia, Korea's Kospi ended 0.81 per cent lower, while Hong Kong's Hang Seng fell 0.26 per cent and Shanghai Composite Index slipped 0.03 per cent.
Japanese market remained shut on account of New Year holiday.
In Europe, Paris CAC was down 0.58 per cent, while Frankfurt's DAX fell 0.63 per cent. London's FTSE slipped 0.29 per cent.
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