Mumbai: The BSE benchmark Sensex extended losses for the second session on Wednesday by declining over 250 points on heavy selling in IT, teck, metal and auto stocks amid weak global cues.
Besides, fresh foreign fund outflows further hurt trading sentiments.
However, crude oil's fall to one-year low in the global market on excess supply concerns, capped the fall in the indices.
The 30-share, after rising briefly to 35,494.25 at the outset, quickly slipped into the negative terrain in line with a weak trend at other Asian markets and touched a low of 35,112.49.
However, it pared early losses on emergence of buying after a higher opening of European shares. The index closed 274.71 points, or 0.77 percent, down at 35,199.80. The gauge had lost 300.37 points on Tuesday.
Also, the broader NSE Nifty, after shuttling between 10,562.35 and 10,671.30 points, finally settled 56.15 points, or 0.53 percent down at 10,600.05.
Sentiments took a hit after broader Asian markets weakened, following a renewed sell-off on Wall Street on Tuesday as energy shares dropped after crude oil prices plunged to a 13-month low amid weak earnings and US-China trade disputes, fuelling worries about economic growth, brokers said.
"Wednesday's action accentuates the recent divergence we have witnessed between India and advanced economies. While the Nasdaq Composite is down 7.2 percent in the past month and the S&P 500 is down 4.6 percent, the Nifty50 is up 2.8 percent in the same time," said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
During the day, midcaps rallied strongly while the Nifty ended lower. Separately, the action in PSU banks and financials also suggests that market fears around liquidity and credit rollovers are abating, he added.
Persistent fall in technology stocks globally, and rupee appreciating against the dollar in the past few days, are the key factors fuelling the negative sentiment in IT stocks, brokers said.
Stocks of software services exporter such as TCS, Infosys, Wipro and Tech Mahindra were the worst hit on the bourses with shares falling up to 3.55 percent.
Other laggards were PowerGrid, RIL, Bajaj Auto, Tata Steel, M&M, Hero MotoCorp, Vedanta, NTPC, IndusInd Bank, L&T, ONGC, HDFC Ltd, ITC Ltd, ICICI Bank, HUL, Bharti Airtel and Coal India, falling up to 2.77 percent.
Among the gainers, shares of private lender Yes Bank was the top performer, climbing 2.83 percent after it reassured that the recent resignations bear no impact on the CEO selection process and that efforts are underway for mutual resolution with co-promoter Madhu Kapur and family.
Axis Bank, Adani Ports, SBI, Asian Paints, Maruti Suzuki, Sun Pharma, Tata Motors, HDFC Bank and Kotak Bank also ended higher with gains up to 2.20 percent.
Shares of aviation and oil marketing companies surged due to sharp drop of nearly 7 percent in global crude oil prices.
Spicejet, Jet Airways and InterGlobe rose up to 5.63 percent.
Shares of state-run oil marketing companies such as IOC, HPCL and BPCL, gained up to 1.76 percent.
Brent crude, the oil prices international benchmark, fell 6.92 percent to $62.17 a barrel on Tuesday on excess supply concerns.
Sector-wise, the BSE IT index emerged biggest loser by plunging 2.92 percent, followed by teck 2.47 percent, power 1.04 percent, metal 0.78 percent, capital goods 0.58 percent and FMCG 0.26 percent, oil&gas 0.12 percent and auto 0.08 percent.
In contrast, realty, healthcare, consumer durables, bankex, PSU and infrastructure ended higher, rising up to 1.53 percent.
Meanwhile, foreign institutional investors (FIIs) sold shares worth a net of Rs 753.17 crore, while domestic institutional investors (DIIs) offloaded shares worth Rs 44.06 crore on Tuesday, as per provisional data.
Elsewhere in Asia, Japan's Nikkei fell 0.35 percent, Korea's KOSPI down 0.29 percent and Taiwan fell 0.03 percent. However, Hong Kong's Hang Seng rose 0.51 percent and Shanghai Composite Index up 0.21 percent.
In Europe, most markets remained firm in their early session. Frankfurt's DAX rose 0.86 percent, while Paris CAC up 0.58 percent. London's FTSE too gained 0.83 percent.
Firstpost is now on WhatsApp. For the latest analysis, commentary and news updates, sign up for our WhatsApp services. Just go to Firstpost.com/Whatsapp and hit the Subscribe button.
Updated Date: Nov 21, 2018 16:24:42 IST