The benchmark Sensex on Thursday slid 255 points, its biggest fall in ten days, dragged down by earnings-related disappointments in bluechips like Cipla and Coal India, amid a weak trend in global markets.
The BSE index, which had gained 114 points in last two sessions, plunged 255.14 points, or 1.25 per cent, to end at 20,193.35. This was the biggest drop since 304.59-point fall on February 3.
"Weak quarterly results of certain large caps, poor global cues and uncertainty over a clear direction to the markets may have led to sharp weakness," said Milan Bavishi, Head Research, Inventure Growth & Securities.
Cipla shares saw a nearly 8 per cent drop after third quarter earnings lagged estimates. PSU Coal India Ltd (CIL) fell 3.4 per cent on disappointing earnings. SBI ended 2.16 per cent down ahead of Q3'FY14 results on Friday. Overall, 26 of 30 Sensex constituents ended down.
The 50-share NSE index Nifty dropped 82.90 points, or 1.36 per cent, to end at 6,001.10. Intra-day, it moved between 5,991.10 and 6,094.40. Today's drop was the sharpest since 87.70-point dip on February 3.
Global stocks fell, led by a drop in Tokyo, ahead of US data releases.
Worries over the domestic economy also led to selling after data on Wednesday showed industrial output contracted 0.6 per cent in December. Retail inflation easing to 2-year low of 8.79 per cent in January, did not appear to enthuse investors.
"Disappointing IIP also weakened market sentiment," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.
Eleven of the twelve BSE sectoral indices closed down.
Rate-sensitive banking and capital goods settled with over two per cent losses. The realty sector, however, ended up.
The MSCI Global Standard Indices will see the deletion of Lupin, Power Grid Corporation of India and Zee Entertainment Enterprises from global standard indices with effect from February 28. All the three scrips ended in the red.
In step with stock markets, the Indian rupee was trading 24 paise lower at 62.35 versus dollar in late trades.
Key Asian benchmark indices in Japan, Hong Kong, South Korea, and Taiwan fell in 0.46-1.79 per cent range. The index from Singapore, however, rose 0.15 per cent.
In Europe, Germany's DAX was down 0.19 per cent, France's CAC down 0.29 per cent and the UK's FTSE down 0.57 per cent.
Jignesh Chaudhary, Head of Research, Veracity Broking Services said: "Indian equity markets opened on a positive note. However, they lost steam and then became weak in the latter part of the day, due to the absence of FII community."
Pharmaceuticals giant, Cipla, was the top loser from the Sensex pack with a fall of 7.70 per cent.
Other losers from the Sensex were BHEL 3.50 per cent, Coal India 3.39 per cent, ONGC 3.29 per cent, Hindalco Industries 3.19 per cent, Tata Power 2.73 per cent, HDFC 2.43 per cent, L&T 2.25 per cent, SBI 2.16 per cent and Dr Reddy's Lab 2.04 per cent.
HUL 2.02 per cent, HDFC bank 1.92 per cent, Tata Steel 1.87 per cent, ICICI Bank 1.81 per cent, Bharti Airtel 1.80 per cent, Axis Bank 1.61 per cent, Bajaj Auto 1.59 per cent, Gail India 1.57 per cent, RIL 1.22 per cent, Wipro 1.16 per cent and ITC 1.11 per cent were other losers.
However, the four Sensex gainers were led by TCS that rose 1.42 per cent and M&M which gained 1.16 per cent.
Among the S&P BSE secotoral indices, Bankex dropped by 2.11 per cent, Capital Goods 2.06 per cent, Oil and Gas 1.84 per cent, Metal 1.81 per cent, Power 1.68 per cent, Healthcare 1.63 per cent and FMCG 0.93 per cent.
The Realty index inched up by 0.39 per cent.
Market breadth remained negative as 1,661 stocks ended in the red while 921 stocks finished in the green. The total turnover dropped to Rs 1,667.49 crore from Rs 1,880.27 crore Wednesday.
Meanwhile, Foreign Institutional Investors (FIIs) bought shares Rs 211.99 crore (net) on Wednesday as per the provisional data issued by the stock exchanges.