NEW DELHI: Equity indices plunged on Friday with the benchmark BSE sensex falling over 850 points dragged by banking and auto stocks.
The 30-share BSE index plunged 889 points or 1.54 per cent to close at 57,012 ; while the broader NSE Nifty settled 263 points or 1.53 per cent lower at 16,985.
Top losers in the sensex pack included IndusInd Bank, Kotak Bank, HUL, Titan, HDFC and Bajaj Finserv with their shares falling as much as 4.89 per cent.
Bucking the trend, IT stocks surged during the day with Infosys gaining 2.84 per cent, HCL Tech closed 0.96 per cent up while TCS finished 0.16 per cent higher.
On the NSE platform, except for Nifty IT, all sub-indices finished in red with Nifty Media, PSU Bank, Realty falling up to 4.74 per cent.
Here are the top reasons behind today's plunge:
Auto, banking, and financial stocks slumped on concern that fast-spreading Omicron cases would derail the economic recovery.
The selling pressure was witnessed across-the-board as 14 of the 30 scrips in the BSE index falling over 2 per cent.
As of 4 pm, India had reported 99 cases of Omicron, with 32 of them recorded from Maharashtra.
* Worries over global inflation
Warnings from major central banks across the world over rising inflation spooked investors.
The Bank of England on Thursday became the world's first major central bank to raise interest rates since the coronavirus pandemic hammered the global economy, and warned of higher inflation after the US Federal Reserve signalled that raging inflation was its biggest risk.
"With the Bank of England becoming the first major central bank to hike rates on Thursday, after the hawkish Fed stance, there is an increasing realisation that inflation is turning more durable than thought earlier," VK Vijayakumar, chief investment strategist at Geojit Financial Services told news agency PTI.
Even the Bank of Japan on Friday dialed back some emergency pandemic-funding but maintained its ultra-loose policy and extended financial relief for small firms, cementing expectations it will remain among the most dovish central banks for the foreseeable future.
* FIIs continue to withdraw money
Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 1,468.71 crore on Thursday, according to stock exchange data.
"There are three major headwinds to the market now - the fast spreading Omicron variant, relentless selling by FIIs and hawkish central banks," VK Vijayakumar, Chief investment Strategist at Geojit Financial Services told news agency PTI.
FIIs have sold $728 million worth of Indian equities this week and $1.73 billion this month, according to Refinitiv Eikon.
* Weak global cues
Major stock markets fell as investors became worried about surging Omicron cases and wrestled with this week's hawkish turn from major central banks in the fight against inflation.
European stocks dropped, Asian shares closed near the year's lows and Wall Street looked set to open weaker after a bruising previous session that was led by sharp falls in tech stocks.
US stocks have now reversed all of their gains from Wednesday when markets welcomed the Federal Reserve's commitment to tackle rising inflation with faster bond tapering and interest rate rises next year.
Chinese blue chips lost 1.59 per cent and suffered their worst week in three months, while an index of Hong Kong-listed tech firms hit a record low, not helped by news Washington put investment and export restrictions on dozens of Chinese companies.
* US yields drop
In a further sign of the cautious mood, the yield on benchmark 10-year US Treasury notes fell to as low as at 1.409 per cent, while the two-year yield was steady at 0.623 per cent, having rolled off its recent highs.
(With inputs from agencies)
