Mumbai: Equity benchmarks crashed to five-month lows on Thursday as lacklustre macroeconomic data and hawkish comments from the US Fed further dented risk appetite.
After a weak opening, the 30-share BSE Sensex plunged more than 750 points in late-afternoon trade, before finally ending at 37,018.32, down by 462.80 points or 1.23 per cent.
Similarly, the broader NSE Nifty dropped 138 points or 1.24 per cent to close below the key 11,000-mark at 10,980.00.
This is the lowest closing level for both the key indices since early March.
Weak economic data, unabated foreign fund outflows and disappointing quarterly earnings also weighed on market sentiment, traders said.
On the global front, the US Federal Reserve reduced the benchmark lending rate by 25 basis points to 2.0-2.25 per cent on Wednesday for the first time in more than a decade.
However, Fed Chair Jerome Powell said the move was not the beginning of a rate cut cycle, sending global markets lower.
In the Sensex pack, Vedanta took the biggest hit (5.55 per cent), followed by Tata Motors, SBI, Yes Bank, Bharti Airtel and Infosys, which lost up to 4.50 per cent.
On the other hand, Maruti, Power Grid, Reliance, Bajaj Auto, Hero MotoCorp, HUL and NTPC ended in the green, spurting up to 1.86 per cent.
Official data released after market hours on Wednesday showed that growth of eight core industries dropped to 0.2 per cent in June, mainly due to contraction in oil-related sectors as well as cement production.
Additionally, the government's fiscal deficit touched Rs 4.32 lakh crore for the June quarter, which is 61.4 per cent of the budget estimate for 2019-20 fiscal.
Major automobile manufacturers on Thursday reported disappointing July sales data, indicating that revival in consumer sentiment is still someway off.
"Indian markets have been in free-fall as FIIs offloaded USD 3 billion worth of Indian stocks over last 1 month post-Budget, on the back of impact of high-taxation and concerns of multi-year low economic growth.
"Further, with Fed Chairman's statement that interest rate cut isn't start of rate-cut cycle has cut short the excitement of investors, as Fed denied to play to the capital-market-gallery. Ongoing results season reflects that there is a chance that Nifty companies may post de-growth in their net profits for the first time," said Jagannadham Thunuguntla, Senior VP and Head of Research (Wealth), Centrum Broking Limited.
Sectorally, BSE metal emerged as the biggest loser, falling 3.37 per cent, following poor Chinese factory output data.
It was followed by basic materials (2.49 per cent), telecom (2.35 per cent), teck (2.07 per cent), information technology (1.92 per cent), bankex (1.80 per cent), capital goods (1.75 per cent), industrials (1.66 per cent), finance (1.62 per cent), realty (1.01 per cent), healthcare (0.92 per cent), oil and gas (0.47 per cent), FMCG (0.45 per cent), power (0.12 per cent) and auto (0.01 per cent).
Energy, consumer durables, and utilities rose up to 0.51 per cent.
Continuing their selling spree, foreign investors offloaded shares worth a net Rs 1,497.07 crore on Wednesday, as per provisional data with stock exchanges.
Elsewhere in Asia, Shanghai Composite Index, Hang Seng, and Kospi ended in the red, while Nikkei edged higher. Equities in Europe were trading mixed in their early sessions.
Meanwhile, the rupee was trading 26 paise lower at 69.06 against the US dollar (intra-day).
The global oil benchmark Brent crude futures fell 1.05 per cent to USD 64.37 per barrel.