Sensex slumped 855 points taking cues from the global markets which dipped on steady fall in crude oil prices.
The BSE index fell as much as 3 per cent since the rupee crisis in 2013 as emerging markets tumbled, while safe-haven assets such as US Treasuries surged.
Investors piled into safe-haven assets and offloaded riskier investments in the face of a weak outlook for global growth and inflation concerns, and growing fears Greece may leave the euro zone.
The benchmark index opened on a negative note at 27,694 against the previous close 27,842. It touched a low of 26937 and high of 27698.93 before closing at 26987.
All BSE sectoral indices ended significantly in the red. Among them, oil & gas plunged the most by 4.17 per cent, followed by realty 3.66 per cent, metal 3.49 per cent and PSU 3.39 per cent.
ONGC among the worst affected in this carnage. Sliding oil hurts and concerns on its operations in Russia turning unviable
— lokeshwarri sk (@lokeshwarri)
January 6, 2015Barring HUL, all other 30-share Sensex constituents ended in the red. Prominent losers among them were ONGC 5.89%, SSLT 5.09%, Tata Steel 4.88%, HDFC 4.69% and Reliance 4.67%. Only HUL was up 1.89%.
Turnover on BSE was up at Rs 3,137 crore against Rs 2,729 crore recorded on Monday.
In NSE, the Nifty ended down 251 points at 8,127.
"Markets are reading the slide in crude oil prices as a symptom of potential recession in the world economy. Some more fall will actually make India further attractive for investment," said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm.
Global crude oil prices tumbled to 5-1/2-year low. Though the sharp fall in crude prices will help India to reduce its import bill, the concern over the future of global economy triggered a huge sell off. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80 per cent of its crude oil requirement.
Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities said the selloff in energy stocks continued as global oil prices fell to about $50 a barrel. Euro zone also posted weal PMI data suggesting slowdown in economy, he said.
Brent crude futures continued its fall after a steep selloff overnight. Brent for February delivery was down by $1.85 to $51.26 a barrel. The contract had lost $3.31 a barrel or 5.9 per cent to settle at $53.11 a barrel on Monday, its lowest level since May 1, 2009. The selloff was triggered by speculation that the rising global output will push up oil supply glut.
Back home, the seasonally adjusted HSBC India Services PMI Business Activity Index declined to 51.1 in December 2014, from 52.6 in November 2014. Both activity and new orders in India's services sector expanded in December at lower rates compared with November.
Are FIIs really bullish on India? 1.6 lakh cr of 2.5 lakh cr FII flows 2014 came into bonds, not stocks. A bet on high rates, more likely
— Aarati Krishnan (@AaratiKrishnan)
January 6, 2015Major losers were India Bulls Real Estate (-7%), DHFL (-7%), HCC (-7%), ARVIND (-7%), HDIL (-6%), Jindal Steel (-6%), BF Utilites (-6%), Amtek Auto (-6%), ONGC (-6%), Unitech (-6%) and Wockhard Pharma (-6%).
Among few gainers include Gujarat State Petronet (4%), Jubilant (4%), Castrol India (2%) and Hindustan Unilever (2%).
The index had lost 45.58 points in the previous session.
Jubilant Life Sciences is up 7%, has received approvals for Mycophenolate Mofetil, an immuno-suppressant, and Rizatriptan from US FDA
— Rajalakshmi Nirmal (@crajalakshmic)
January 6, 2015Global markets
European shares sank for a third day on Tuesday as a slide in oil prices showed no sign of easing off, supporting traditional safe-haven assets such as top-rated government bonds, the Japanese yen and the Swiss franc.
Asian shares had slumped overnight after another day of drama on oil markets that drove US crude to less than $50 a barrel for the first time since the first half of 2009 and handed Wall Street its worst losses in three months.