Sensex falls 440 points, Nifty tests 19,650

Equity benchmark indices Sensex and Nifty buckled under heavy selling pressure on Thursday as investors pared exposure to bellwether stocks HDFC Bank, M&M, Nestle and Reliance Industries amid a mixed trend in global markets.

Besides, the interest rate hike by the US Fed failed to boost sentiments in the domestic market, which saw a steep decline led by banking and auto stocks, traders said.

After opening with gains of over 125 points, BSE Sensex plunged 440.38 points or 0.66 per cent to settle at 66,266.82, while Nifty declined 118.40 points or 0.60 per cent to close at 19,659.90.

M&M was the biggest loser in the Sensex chart, falling 6.39 per cent, followed by Tech Mahindra, Nestle India, Bajaj Finance, Axis Bank, ITC, JSW Steel, HDFC Bank and RIL.

On the other hand, Sun Pharma, Tata Motors, Bharti Airtel, L&T and Infosys were among the winners, rising up to 2.10 per cent.

According to Vinod Nair, Head of Research at Geojit Financial Services, the US Federal Reserve's interest rate move, which triggered positive cues globally, failed to boost the sentiment in the domestic market, which saw a sharp correction led by banking and auto stocks.

"The FOMC's decision aligned with market expectations as they implemented a 25 bps hike and expressed a data-centric approach for future rate actions. Positive global sentiment prevailed due to the reduced prospects of a US recession. Despite this, the domestic market witnessed sharp corrections led by banks and autos, while pharma stocks performed on a positive start to their earnings season," Nair said.

The shares of the Mahindra group firms fell amid reports that M&M is looking to buy around 10 per cent stake in RBL Bank.

Tech Mahindra on Wednesday reported a 38 per cent fall in June quarter net profit at Rs 692.5 crore.

On the 50-stock index Nifty, as many as 21 closed the session in green while 29 ended in red.

In Asian markets, Hang Seng went up 1.41 per cent and Japan's Nikkei was 0.68 per cent higher. Chinese index Shenzhen was down 0.41 per cent and Shanghai slipped 0.2 per cent.

European markets were broadly higher with CAC 40 of France rising 1.35 per cent while Germany's DAX gained 0.89 per cent. The UK's FTSE 100 was up 0.30 per cent.

In the US market on Wednesday, S&P 500 closed 0.02 per cent lower, while Dow Jones settled 0.23 per cent higher.

Meanwhile, global oil benchmark Brent crude was trading 0.95 per cent higher at USD 83.71 a barrel.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they bought shares worth Rs 922.84 crore, according to exchange data.

Breaking its three-session losing run on Wednesday, the 30-share BSE Sensex climbed 351.49 points or 0.53 per cent to settle at 66,707.20. The broader NSE Nifty advanced 97.70 points or 0.50 per cent to end at 19,778.30.