Sensex drops 257 pts to 26,994; Nifty down 69 pts to 8,204 ahead of Fed meet

The 30-share index plunged 257.20 points or 0.95% to crack below the 27,000-mark.

The BSE Sensex came off seven-month highs on Thursday after logging its biggest single-day fall in three weeks, mirroring global caution ahead of the US Fed meet and hit by an IT sell-off after Infosys flagged volatility issues for the next few quarters.

The 30-share index plunged 257.20 points or 0.95% to crack below the 27,000-mark.(PTI)

The 30-share index plunged 257.20 points or 0.95% to crack below the 27,000-mark.

There were also concerns that the recent gains in crude oil prices could adversely impact India’s fiscal deficit situation and increase fuel price inflation.

“The market tanked as weak European cues and surge in oil price have turned investors risk averse,” said Vinod Nair, head of research at Geojit BNP Paribas Financial Services.

India’s second-largest software services firm Infosys was the worst performer with a plunge of 4.27% at Rs 1,185.45 after the company said challenges in retail, energy and insurance sectors could result in “quarterly bumps”. TCS followed suit and slumped 1.27% to Rs 2,577.50.

Participants also preferred to cut down on their positions ahead of key economic data Industrial Production data due on Friday.

The Sensex resumed lower at 26,994.48 and dropped further to 26,692.35 before finishing at 26,763.46, disclosing a loss of 257.20 points or 0.95%. The gauge had risen by 243.21 points in the past two days.

The NSE 50-share Nifty also dropped by 69.45 points or 0.84% to close at 8,203.60.

The broader markets too felt the heat with the BSE mid-cap index falling 0.47% while small-cap edged up by 0.04%.

In stock specific action Hero MotoCorp fell close to 3% after it reported decline in sales in May. Maruti Suzuki and Tata Motors however perked up.

Regional markets ended lower as investors weighed risks ahead of the US Federal Reserve meet next week. Japan, Singapore and South Korea based shares dropped by 0.14% to 0.97%.

European shares extended initial losses, dropping for a second-straight day after European Central Bank’s President Mario Draghi warned Europe is at risk of suffering lasting economic damage from weak productivity and low growth.

Key indices like France, Germany and the UK fell between 0.82% and 1.17%.