Four reasons why Sensex cracked over 800 points, Nifty breached 7,000

Extending losses for the fourth straight session on Thursday, the S&P BSE Sensex tanked 807 points to end below its crucial psychological level of 23,000 for the first time since May 09, 2014, while broader CNX Nifty breached its key 7000-mark for the first time since May 12, 2014.

Below are the key reasons that caused market fall:

1) Janet Yellen testimony

The US Federal Reserve Chair Janet Yellen said she is unlikely to reverse its plan to raise interest rates further this year, but she also highlighted growing risks facing the economy.  

"Tighter credit markets, volatile financial markets, and uncertainty over Chinese economic growth have raised risks to the US economy," Yellen told Congress on Wednesday.

"The general message she intended to deliver is that additional rate hikes remain the base case, but markets have to stabilise before we see more," an analyst told Reuters.

2) Sea of red across the globe

The latest trigger that swiftened market fall in the afternoon trade was over 3 per cent fall in European markets. France's CAC 40 dropped 3.2 per cent in early trade, while shares in Frankfurt lost 2.7 per cent and the London FTSE was down 2.4 per cent. Europe had snapped three-day fall on Wednesday.

Among Asian markets, Hong Kong's Hang Seng index closed 3.8 per cent lower after the market returned from a three day closure for the Lunar New Year. Chinese markets will re-open on Monday, while Japanese markets are closed today for a public holiday.  

3) Banking stocks bleed

All banking stocks on BSE Bankex index were trading deep in red led by Punjab National Bank shares. The index fell as much as 3.33 per cent after State Bank of India reported 62 per cent fall in its December quarter net profit on higher provisions.

It is notable banking stocks across the globe are on a falling spree amid worries that a prolonged period of slowing global growth, sinking oil prices and rock-bottom interest rates will inflict pain on the world's largest financial institutions.

4) Crude days away from $25?

Technical charts predict crude prices may be days away from hitting $25 a barrel or even lower as weakening demand is putting more pressure on a market already staggering from oversupply. Goldman Sachs also said prices would remain low and volatile until the second half of the year.

International benchmark Brent crude futures were trading at $30.53 per barrel at 14:53 IST. US West Texas Intermediate (WTI) crude futures fell below $27.