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Markets slipped further in morning trades with the Sensex down 215 points at 20,432 and the Nifty slipped 66 points to trade around 6,055 levels. ITC, ICICI Bank, Infosys, Reliance Industries and L&T are among the top losers weighing on the indices.
The selloff was visible in the broader markets too with the mid and smallcap indices down 1% each.
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(Updated at 1030 hrs)
Markets started with a gap down with the benchmark indices opening lower by nearly 1% following weak global cues as concerns in the emerging markets weighed on investor sentiments. Overnight, the Federal Reserve announced another $10 billion cut in its monthly bond purchases. Volatility is likely to be the order of the day ahead of January F&O expiry due today.
At 0945 hrs, the Sensex was down 195 points at 20,451 and the Nifty was hovering close to the 6,050 mark, down over 60 points. For the Sensex, today’s opening was the lowest since November22, 2013.
The smallcap index started lower by 0.5% and the midcap index slipped 0.8% in the opening deals.
In Asia, shares took a spill on Thursday as strains in emerging markets returned with a vengeance and the Federal Reserve further scaled back its stimulus - sending investors scurrying to safety in bonds and yen.
Adding insult to injury, a measure of Chinese manufacturing slipped to a six month low for January and gave speculators a fresh excuse to target risk assets such as the Australian dollar.
While analysts emphasised that January data is heavily distorted by the timing of the Chinese Lunar holidays, the drop in the HSBC PMI was bound to cause ripples in already skittish markets.
Japan's Nikkei was already down 3.1% at its lowest since mid-November. Shanghai slipped 0.5% while MSCI's broadest index of Asia-Pacific shares outside Japan lost 1%.
Overnight, U.S. stocks dropped more than 1% on Wednesday, hitting session lows after the Federal Reserve stuck with its plan to scale back stimulus even in the midst of emerging market turmoil.
With the day's decline, the S&P 500 is down 4% for the month - its worst monthly loss since May 2012. Some investors have been bracing for a correction, given the S&P 500's gain of 30% last year.
Trading was volatile after the Fed's move, which further reduces its monthly bond purchases by $10 billion a month.
The Dow Jones industrial average fell 1.19%, to end at 15,739. The S&P 500 lost 1.02%, to finish at 1,774. The Nasdaq Composite dropped 1.14%, to close at 4,051.
Sectors & Stocks
Selling was visible across the sectors with Realty, Consumer Durables indices down over 2% each.
FMCG, Metal, Power, Bankex and Capital Goods indices started lower by over 1% each.
Bharti Airtel up 2.5% and Sun Pharma up 0.4% were the only gainers among Sensex-30.
Hindalco, ICICI Bank, SBI, Axis Bank, BHEL, HDFC Bank and Sesa Sterlite down 1.5-2% were the major losers in the opening deals.
ITC, Tata Power, Tata Steel, L&T, ONGC, Hero MotoCorp, Maruti Suzuki and HUL down 1% each were the other notable names in red.
The market breadth was negative on the BSE. 754 stocks declined while 261 stocks advanced on the BSE.
