The Indian equity benchmarks slumped on Monday on the back of weak global markets as Asian shares stumbled to a one-week low and perceived safe haven yen edged higher amid a relentless surge in coronavirus cases and fears of rising inflation while oil prices fell on oversupply worries. The Sensex fell as much as 680 points to hit an intraday low of 52,460.52 and Nifty 50 index fell below its important psychological level of 15,800 to hit an intraday low of 15,729.45.
As of 1:21 pm, the Sensex was down 566 points at 52,574 and Nifty 50 index dropped 159 points to 15,764.
European markets were also trading on a weak note as Germany's DAX dropped 1.34 per cent, England's FTSE 100 index fell 1.31 per cent and France's CSC40 index tumbled 1.55 per cent.
Global economic growth is beginning to show signs of fatigue while many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into some form of lockdown. The spectre of elevated inflation, which the market has long feared, is also haunting investors.
Economists at Bank of America downgraded their forecast for US economic growth to 6.5 per cent this year, from 7 per cent previously, but maintained their 5.5 per cent forecast for next year.
Back home, selling pressure was broad-based as all the 11 sector gauges, barring the index of realty shares, were trading lower led by the Nifty Bank and Private Bank indexes' over 2 per cent fall.
Nifty Financial Services, Auto, Metal and PSU Bank indices also fell between 1-2 per cent.
Broader markets were also trading with a negative bias as Nifty Midcap 100 index fell 0.75 per cent and Nifty Smallcap 100 index 0.1 per cent.
HDFC Bank was top Nifty loser, the stock dropped over 3 per cent to hit an intraday low of Rs 1,466 after the country's largest private sector lender reported net profit of Rs 7,730 crore against expectations for profit of Rs 8,072 crore, according to Refinitiv data.
The disruptions led to a decrease in retail loan originations, sale of third-party products, card spends and efficiency in collection efforts, HDFC Bank said in its results statement.
IndusInd Bank, HDFC, Axis Bank, Kotak Mahindra Bank, ONGC, Hindalco, HDFC Life, State Bank of India, UPL, Maruti Suzuki, Bajaj Finance, Bajaj Auto and Eicher Motors also fell 1-3 per cent.
On the flipside, Bharat Petroleum, Divis Labs, Tata Consumer Products, NTPC, Nestle India, Larsen & Toubro, UltraTech Cement, Britannia Industries, Indian Oil and Dr Reddy's Labs were among the notable losers.
The overall market breadth was neutral as 1,674 shares were advancing while 1,548 were declining on the BSE.