Domestic equity market extended losses for the second trading session and registered the biggest fall since January 6, 2015.
The benchmark index S&P BSE Sensex tumbled 722.77 points, or 2.63 per cent, and closed the day at 26,717.37. The CNX Nifty index on the National Stock Exchange also slid 227.80 points, or 2.74 per cent, at 8,097. Among the BSE sectoral indices, the S&P BSE Capital Goods index tumbled the most 4.24 per cent to 15,991.98.
It was followed by S&P BSE Realty index (down 4.04 per cent to 1,561.69), S&P BSE Power index (down 3.67 per cent to 2,041.32), S&P BSE Bankex (down 3.66 per cent to 20,419.48), S&P BSE Metal index (down 3.17 per cent to 9,912.25), S&P BSE Oil & Gas index (down 3.13 per cent to 9,315.87).
Rest all other indices also ended the day in red.
Ajay Jaiswal, head of research, Microsec Financial Services, says, "The cut in earnings estimates by leading research houses for Nifty and Sensex companies for 2015-16 between 2-4 per cent on the back of poor results this quarter and less visibility of earnings growth as expected earlier may have led to index based basket selling on Wednesday."
Hiren Dhakan, associate fund manager, Bonanza Portfolio, says, "Crude continued to rally and rose towards its fresh 2015 highs. This spooked FIIs as increased oil bill would put pressure on India's trade deficit and currency valuations. Increased inflation would also squeeze profit margins of India Inc which would reflect in the profitability. Further, Nifty broke the crucial 200-Day Moving Average (DMA) and fell below the 8,100 mark once again. This sparked a strong sell signal for most technical charts that added to the selling pressure."
Among Nifty stocks, Bharat Heavy Electricals Ltd, Kotak Mahindra Bank, Ambuja Cements, Bank of Baroda and ICICI Bank stood at the bottom of Nifty's performance charts.
These stocks plunged by 6.02 per cent, 5.45 per cent, 5.43 per cent, 5.12 per cent and 4.96 per cent, respectively.
Overall market breadth for the day remained negative as advances to declines ratio for Nifty remained 1:49 for the day with Bharti Airtel being the only stock in green.
The share price of Bharti Airtel jumped 0.59 per cent to Rs 389.35. According to the website of NSDL, foreign institutional investors remained net sellers in the capital market, selling shares worth Rs 448.95 crore. Asian peer markets, Nikkei was up by 0.06 per cent while Hang Seng and Shanghai was down by 0.41 per cent and 1.62 per cent, respectively.