The Indian equity benchmarks staged partial recovery after moving sharply lower in Friday morning deals led by losses in HDFC, Reliance Industries, ICICI Bank, HDFC Bank, State Bank of India and Kotak Mahindra Bank. The Sensex fell as much as 880 points and Nifty 50 index dropped below its important psychological level of 17,650. Consistent selling by foreign institutional investors amid downgrade of Indian equities by global investment bank Morgan Stanley has dented the investors' sentiment towards Indian markets.
As of 9:46 am, the Sensex was down 292 points at 59,692 and Nifty 50 index plunged 76 points to 17,781.
Meanwhile, Asian shares and US stock futures slipped on Friday, as Amazon and Apple quarterly earnings bucked a recent strong trend and growth and inflation fears continued to weigh. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent in early trading and was on track for a weekly loss of 1.3 per cent, snapping three weeks of gains. Japan's Nikkei reversed early losses to trade flat.
Back home, foreign institutional investors sold shares worth Rs 3,818.51 crore on Thursday while foreign institutional investors bought shares worth Rs 836.6 crore.
The FIIs have so far this month sold shares worth more than Rs 11,000 crore, according to NSDL data.
Selling pressure was broad-based as ten of 15 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty Private Bank index's nearly 2 per cent fall. Nifty Bank, Oil & Gas, PSU Bank and Financial Services indices also fell between 1-2 per cent.
On the other hand, metal, information technology and pharma shares were witnessing some bying interest.
Mid- and small-cap shares were also facing selling pressure as Nifty Midcap 100 and Nifty Smallcap 100 indices dropped 1 per cent each.
HDFC was top Nifty loser, the stock fell 3 per cent to Rs 2,812. IndusInd Bank, Kotak Mahindra Bank, Axis Bank, HDFC Bank, Reliance Industries, Eicher Motors, Bharat Petroleum, Nestle India, NTPC, Sun Pharma and State Bank of India also fell between 0.7-2.4 per cent.
On the flipside, Adani Ports, Tata Steel, Jindal Steel, JSW Steel, Titan, Coal India, ITC, HCL Technologies, Divi's Labs and UltraTech Cement were among the gainers.
The overall market breadth was negative as 1,606 shares were declining while 990 were advancing on the BSE.