Markets fell for a second straight session Thursday as investors dumped riskier assets on fears that soaring inflation would hurt corporate earnings and spark an economic slowdown.
The Nifty fell 1.87% to 15,937 in early trade on broad-based losses, while Sensex dropped 1.8% to around 53,240.
The move was in line with Asian peers, which traded sharply lower after a brutal sell-off on Wall Street sent the S&P 500 down by the most since June 2020.
"The domestic market has resumed a downtrend taking cues from our global counterparts, US markets specifically," said Ajit Mishra, vice president, research at Religare Broking.
He cited the expectations of aggressive of monetary policy tightening to combat unruly price pressures as a drag on sentiment.
The Reserve Bank of India had earlier this month raised its main lending rate off record lows in a surprise move and is expected to continue tightening its monetary policy.
Markets globally have also come under pressure from the Russia-Ukraine conflict and the supply chain crisis which has been worsened by China's zero-COVID policy. Despite a brief recovery earlier this week, India's main stock indexes have declined nearly 7% so far this month.
On Thursday, Nifty IT was the top loser among sub-indexes with a fall of 3.8%. IT majors Infosys, Tech Mahindra and Wipro were the top decliners on the Nifty 50, plunging between 3.6% and 4%.
Nifty Metal fell 2.9%, with aluminium and copper producer Hindalco Industries and JSW Steel both dropping more than 3%.
However, ITC gained 4.7% and was among the only two gainers on Nifty after the cigarettes-to-hotel conglomerate reported a jump in March-quarter profit.
