The Indian equity benchmarks crashed on Friday and posted their worst single-day performance since March 30. The Sensex and Nifty mirrored losses in losses in other global markets as a rout in global bond markets sent yields flying and spooked investors amid fears the heavy losses suffered could trigger distressed selling in other assets. The Sensex dropped as much as 2,149 points or 4.2 per cent and Nifty 50 index crashed 4.2 per cent to fall below its important psychological level of 14,500 mark.
The Sensex tumbled 1,939 points or 3.8 per cent to close at 49,099.99 and Nifty 50 index cracked 3.76 per cent or 568 points to settle at 14,529.15.
"Low interest rates made the rally possible form levels of 7,500 and the Nifty has doubled from those levels in last 12 months now signs of interest rate reversal are visible which means liquidity will dry up and easy money will not sustain. Nifty can go down 13,900 levels in the near term given the high valuations Nifty is trading at," A K Prabhakar, head of research at IDBI Capital told NDTV.
MSCI's Emerging Markets equity index suffered its biggest daily drop in nearly 10 months and was 2.7 per cent lower, while European shares opened in the red, with the STOXX 600 down 0.7 per cent, recovering from heavier losses earlier in the session.
The MSCI world equity index, which tracks shares in 50 countries, was 0.9 per cent lower and heading for its worst week in a month.
Asia saw the heaviest selling, with MSCI's broadest index of Asia-Pacific shares outside Japan sliding more than 3 per cent to a one-month low, its steepest one-day percentage loss since May 2020.
Back home, selling pressure was so intense that all the 11 sector gauges compiled by the National Stock Exchange ended lower while India VIX, the volatility index, spiked 23 per cent.
Financial services and banking shares were the worst hit during the session, the Nifty Financial Service index tumbled 5 per cent and Nifty Bank index crashed 4.78 per cent.
Nifty Auto, PSU Bank, Realty, FMCG, IT and Media indexes also fell over 1.5 per cent each.
Broader markets also succumbed to the selling pressure as Nifty Midcap 100 and Nifty Smallcap 100 indexes dropped over a per cent each.
ALl shares in the Nifty 50 basket closed in the red with. ONGC was the top Nifty loser, the stock plunged 6.5 per cent to 111. Mahindra & Mahindra, Power Grid, JSW Steel, Hero MotoCorp, GAIL India, Bajaj Finserv, Axis Bank, Kotak Mahindra Bank, Grasim Industries and UPL also fell over 5 per cent.
The overall market breadth was extremely bearish as 1,853 shares ended lower while 1,062 closed higher on the BSE.