Market benchmark Sensex plummeted by 310 points today to crack below the 28,000 mark, its biggest single-day fall in nearly seven weeks, on heavy profit-booking in oil&gas, auto and healthcare stocks as investors judged the recent rally was overdone.
Global trend was also muted, with lower closing in Asian markets and subdued opening in Europe amid the dollar weakening against the yen after the US data showed decline in productivity.
Shares of Adani Ports and Special Economic Zone (APSEZ) surged 7.93 per cent after the company reported 31 per cent jump in consolidated net profit for the first quarter.
Drug maker Lupin fell close to 4 per cent to Rs 1,545.05 on poor first quarter earnings numbers.
Stocks of refinery, energy, auto, healthcare, power, consumer durable, utilities and banking sectors fell sharply on heavy selling pressure.
"Market nosedived as investors believed that the recent rally has outpaced the market valuation, which is trading at a premium to last three years average," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.
He added that bond yields and gold have seen momentum as liquidity is shifting towards safe haven assets.
The BSE Sensex resumed higher at 28,133.36 and hovered in a range of 28,143.28 to 27,736.62 before closing at 27,774.88, showing a fall of 310.28 points or 1.10 per cent -- the biggest since the global sell-off on June 24, after the UK voted to leave the European Union.
The NSE Nifty slipped below the 8,600-level by dropping 102.95 points or 1.19 per cent to close the day at 8,575.30. Intra-day, it hovered between 8,690.10 and 8,564.60.
Traders said oil prices extending losses in Asian trade after industry data showed a rise in US crude stockpiles, supporting oversupply concerns, too had a negative impact.
Overseas, Asian and European stocks witnessed a mixed trend as investors assessed the timing of the next interest rate hike by the US Federal Reserve.
Key Asian indices like in Hong Kong, South Korea, Singapore and Taiwan firmed up by 0.04 per cent to 0.50 per cent, while China and Japan fell up to 0.23 per cent.
Europe was also lower, with indices in France, Germany and the UK down 0.09 per cent to 0.22 per cent.
The recovery in Sensex was supported by gains in Asian
Paint, Cipla, Infosys, Lupin, GAIL Dr Reddy's, Maruti Suzuki, Power Grid, Sun Pharma, ITC Ld, TCS, M&M, HDFC Bank and Hero MotoCorop, perking up to 1.94 per cent.
From the 30-share Sensex kitty, 17 ended higher, while 13 led by NTPC, Bharti Airtel, RIL, Adani Ports, HDFC Ltd, SBI, Tata Motors, Bajaj Auto, Axis Bank and Hind Unilever ended in negative zone.
Sectorwise, BSE consumer durables gained the most, rising 1.69 per cent followed by metal (1.48 pc), IT (1.05 pc), teck (0.84 pc), healthcare (0.52 pc) and FMCG (0.03 pc).
In broader markets, the BSE small-cap rose 0.25 per cent while mid-cap ended 0.20 per cent down.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 56.25 crore last Friday, showed provisional data.
