The Indian equity benchmarks fell sharply in afternoon deals on the back of weak global cues. The Sensex fell as much as 626 point and Nifty 50 index tumbled below its important psychological level of 15,700. Global stocks fell on Thursday, tracking a slump in Asia amid a widening crackdown on the tech sector in China and concern over the strength of the country's economic recovery, while oil prices also sagged on supply uncertainty. ICICI Bank, HDFC Bank, Reliance Industries, Kotak Mahindra Bank, Hindustan Unilever and State Bank of India were among the top drags on the Sensex.
As of 2:47 pm, the Sensex dropped 507 points to 52,547 and Nifty fell 166 points to 15,713.
European markets fell sharply ahead of European Central Bank President Christine Lagarde's news conference. Germany's DAX was down 1.3 per cent, French CAC40 index dropped 1.9 per cent and FTSE 100 fell 1.53 per cent.
"With earnings season kicking in, markets might get a sense of direction since most positive triggers had already been factored in," said Gaurav Garg, head of research at CapitalVia Global Research in Indore told Reuters.
"IT companies are expected to announce robust earnings but we might see some correction if there are any shortfalls in their results as expectations from the sector are very high."
Selling pressure was visible across the board as all the 11 sector gauges, barring the index of real estate shares, were trading lower led by the Nifty Metal index's 1.4 per cent decline. Nifty FMCG, Pharma, PSU Bank, Auto, Financial Services and Bank indices dropped 0.5-0.9 per cent.
Mid- and small-cap shares were trading mixed as Nifty Midcap 100 index was trading flat and Nifty Smallcap 100 index advanced 0.3 per cent.
Hindalco, JSW Steel, Tata Motors, Sun Pharma, Tata Steel, ONGC, Hindustan Unilever, Cipla, Britannia Industries, Bajaj Finance and Grasim Industries were among the top Nifty losers.
On the flipside, Bajaj Auto, Shree Cements, NTPC, IndusInd Bank, Titan and Tech Mahindra were among the gainers.
The overall market breadth was positive as 1,667 shares were advancing while 1,400 were declining on the BSE.