Dalal Street witnessed a meltdown during opening trade on Monday, joining the world-wide financial rout as data showed US inflation at fresh 40-year high in May at 8.6 per cent, weakening the narrative of 'peaking inflation' and opening up doors for aggressive Fed rate hikes ahead.
The domestic financial market shaved of a full 2 per cent of its valuation, as the bears were out in full force.
By 9.20 am, the BSE Sensex fell below the 53,000 mark and was trading over 1,400 points or 2.66 per cent lower at 52,860.68. Nifty50 was trading at 15,779.50, down over 400 points or 2.61 per cent. Midcap and smallcap indices declined up to 2.2 per cent, tracking weak global markets and unrelenting foreign fund outflows.
Weakness in index majors Reliance Industries and ICICI Bank also weighed on the domestic equity markets.
All the 30-share Sensex pack of firms were trading lower in early trade, with Bajaj Finserv, Bajaj Finance, ICICI Bank, State Bank of India, Reliance Industries, Kotak Mahindra Bank, Tech Mahindra and IndusInd Bank emerging as the major laggards.
Shares of Life Insurance Corporation (LIC) of India fell for the tenth straight session on Monday. The 30-day lock-in for anchor investors ended today and the stock is now down over 28 per cent as against its issue price of Rs 949.
Anchor investors, who collectively bought nearly 59.3 million shares a day before the IPO opened for subscription at Rs 949 apiece, can sell their shares in the open market from Monday.
The BSE benchmark index had ended 1,016.84 points or 1.84 per cent lower at 54,303.44 on Friday. The broader NSE Nifty plunged 276.30 points or 1.68 per cent to 16,201.80.
Elsewhere in Asia, markets in Seoul, Tokyo, Hong Kong and Shanghai were trading with deep cuts in mid-session deals.
Stock exchanges in the US ended sharply lower on Friday.
"The near-term market trend is weak. The May US inflation print at 8.6 per cent against the market expectation of 8.3 per cent is likely to turn the Fed more hawkish.
"Such a scenario would be negative for risky assets like equity, particularly in the context of declining global growth. The Indian market will stabilize only when the US market stabilises," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Meanwhile, international oil benchmark Brent crude fell 1.37 per cent to USD 120.31 per barrel.
Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 3,973.95 crore on Friday, as per exchange data.
The Indian rupee touched a lifetime low of 78.28 to the dollar while the benchmark 10-year bond yield hit 7.60%, its highest since Feb 28, 2019.
(with inputs from agencies)