The Indian equity benchmarks snapped their two-day winning streak on Wednesday mirroring losses in global markets as oil prices hit their highest level in seven years, fuelling concerns about rising inflation. The Sensex fell over 850 points from the day's highest level and Nifty 50 index fell below 17,650 after hitting an intraday high of 17,884.60. The Indian benchmarks managed to defy the weak trend in global markets in the first half of the session but with a spike in volatility coupled with profit booking at higher levels, the benchmarks gave up intraday gains and fell sharply, analysts said.
The Sensex ended 555 points lower to close at 59,190 and Nifty 50 index dropped 176 points to settle at 17,646.
Weighing on equity markets were oil prices hitting their highest since Nov. 2014, with investors anxious that spiralling energy costs could force central banks to raise rates more quickly to combat rising inflation.
The Euro STOXX 600 fell 1.8 per cent, denting gains made in its best day in 11 weeks on Tuesday, with tech stocks down more than 2 per cent and Germany leading losses at 1.6 per cent.
Back home, selling pressure was broad-based as all the 15 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty Metal index's nearly 3 per cent fall.
Nifty Auto, Information Technology, Pharma, PSU Bank, Realty and Consumer Durable indices also fell 1-2 per cent.
Mid- and small-cap shares witnessed selling pressure as Nifty Midcap 100 index dropped 0.8 per cent and Nifty Smallcap 100 index tumbled 0.9 per cent.
In the Nifty 50 basket of shares on eight stocks managed to close higher. Hindalco was top Nifty loser, the stock fell 4 per cent to close at Rs 475. SBI Life, IndusInd Bank, Tata Steel, JSW Steel, Coal India, Adani Ports, Tata Motors, Bajaj Auto, Shree Cements, HCL Technologies, Cipla and Reliance Industries also fell between 2-3.6 per cent.
On the flipside, Tata Consumer Products, ONGC, UPL, Britannia Industries, HDFC Bank, Bharat Petroleum, HDFC and Bajaj Finance were among the notable gainers.
The overall market breadth was negative as 1,851 shares ended lower while 1,437 closed higher on the BSE.