Mumbai: Retreating from its record high hit in the previous session, the BSE Sensex today sank about 364 points to post its biggest single-day plunge in eight months, dragged by FMCG giant ITC whose shares fell nearly 13 per cent due to increased levies on cigarettes.
The NSE Nifty also cracked about 89 points to slip below the psychological 9,900-mark.
Cigarette major ITC emerged as the worst performer after its stock dived 12.63 per cent to Rs 284.60 following the GST Council's decision to hike cess on cigarettes by 48.50 paise to 79.20 paise per stick.
Other cigarette stocks were Godfrey Phillips and VST Industries also tanked by up to 7.83 per cent.
The market sentiment was also impacted by mixed global cues as setbacks for a healthcare overhaul in the US raised doubts over prospects for a range of reforms backed by President Donald Trump.
"GST cess on cigarettes dented Nifty's surge, while global markets and the uncertainties prevailing around the earnings season kept the domestic investors cautious today. However, strength in rupee and recovery in the PSU bank stocks amidst NPA resolution hopes, shall keep 10k aspirations alive," Anand James, Chief Market Strategist, Geojit Financial Services Ltd, said.
The 30-share Sensex, after opening lower at 31,775.54, reached an intra-day high of 31,911.61. The index, however, slipped as the day progressed and touched a low of 31,626.44 during the day. It finally settled at 31,710.99, down 363.79 points, or 1.13 per cent, from yesterday's close.
This is the Sensex's biggest single day fall since November 21 when it had lost 385.10 points.
The index had closed at record high of 32,074.78 points after scaling all-time intra-day high of 32,131.92 points in yesterday's trade.
The Nifty opened lower today at 9,832.70. After touching an intra-day high of 9,885.35, the index headed south to touch a low of 9,792.05, before finally settling at 9,827.15, down by 88.80 points, or 0.90 per cent.
Besides cigarette makers, other laggards were Reliance Industries, SBI, Power Grid, HDFC Ltd, NTPC, ICICI Bank, Airtel, Kotak Bank and M&M, falling up to 2.03 per cent.
Among the gainers, Asian Paint led the Sensex pack by climbing 1.82 per cent, followed by Sun Pharma 1.18 per cent, Axis Bank 1.18 per cent, ONGC 1.06 per cent, Hero MotoCorp 0.83 per cent, Dr Reddy's 0.83 per cent and Tata Steel 0.71 per cent.
Share of cement maker ACC continued its upward journey and gathered another 0.49 per cent to Rs 1,759.80 after the company yesterday reported a 32.57 per cent increase in its consolidated net profit at Rs 326.23 crore for the second quarter ended June 30.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 328.61 crore, while domestic institutional investors (DIIs) sold shares worth a net Rs 447.14 crore yesterday, as per provisional data.
Sectorally, the BSE FMCG index suffered the most by dropping 6.12 per cent followed by realty 1.10 per cent, oil & gas 0.79 per cent, consumer durables 0.66 per cent, power 0.60 per cent and PSU 0.33 per cent.
However, IT index rose 0.24 per cent, auto 0.20 per cent, healthcare 0.18 per cent and teck 0.17 per cent.
In tandem with overall trends, the broader markets too succumbed to profit-booking by investors at record levels, pulling down the mid-cap index by 0.60 per cent and small-cap index by 0.58 per cent.
Overseas, European stocks were trading lower as oil and financial stocks declined. Key indices like France and Germany dropped by 0.24 per cent to 0.55 per cent while UK's FTSE was quoted higher by 0.06 per cent.
In Asian markets, Japan's Nikkei fell 0.59 per cent, while Shanghai Composite Index rose 0.35 per cent and Hong Kong's Hang Seng up 0.21 per cent.