The 30-share BSE sensex continued to remain under selling pressure and slumped 980.93 points or 1.61% to settle at 59,845.29. During the day, it tanked 1,060.66 points or 1.74% to 59,765.56.
On similar lines, the broader NSE Nifty dropped 320.55 points or 1.77% to end at 17,806.80.
From the Sensex pack, Tata Steel plunged nearly 5 per cent. Other major laggards were Tata Motors, State Bank of India, Bajaj Finserv, Reliance Industries, Wipro, IndusInd Bank, Larsen & Toubro and Maruti Suzuki.
Sensex closed below 60,000 for the first time since October 28, marking the worst week for the both indexes in 6 months.
Both the indexes fell over 2.4% on a weekly basis.
Here are the top reasons behind today’s market crash:
* PSU Bank, metal stocks led market fall
Public sector banks dragged the most today with the quarter falling 6.06% on NSE Nifty. Indian Overseas Bank (IOB) plunged the most at 14.82%, while Union Bank dragged 10.57%. Interestingly, PSU Bank stocks were generating the highest returns for investors since the last 2 months.
Metal and Media indices also dragged 4.47% and 4.99%, respectively. Metal stocks fell amid rising Covid-19 concerns in China, the world’s largest consumer of steel.
* US economic data
US weekly jobless claims data pointed to a still tight labour market, while the US economy rebounded faster than previously estimated in the third quarter.
Specifically, investors are fretting that the Fed funds target rate could rise higher and stay there longer than previously expected, raising the possibility of an economic contraction.
Market attention will now shift to US personal consumption expenditures (PCE) data due later on Friday that will provide further clues on whether inflation is continuing to moderate.
The US central bank raised interest rates by 50 basis point this month after four consecutive 75 basis-point hikes this year, but Chair Jerome Powell has said the Fed will deliver more hikes in 2023 even as the economy slips towards a recession.
* Rising Covid fears
Rising Covid cases in world’s second biggest economy China has spooked investor sentiments globally, amid concerns about the new variant of infection.
China’s stringent zero-Covid policy deployed mass testing and strict quarantine measures, which were revised earlier this month in the wake of mass anti-government protests.
Several Chinese cities endured lengthy lockdowns, often prompted by a handful of infections and there were indications that people were starting to run out of patience.
Experts are now predicting a difficult time ahead, with a grim prediction that close to 2 million deaths due to the virus by next year.
India has also strengthened Covid measures and re-introduced random testing of international arrivals from December 24.
* Global markets sentiments
Global shares were mixed on Friday as the last full trading week of the year comes to a close, with looming US inflation data a reminder of how surging prices and interest rates have fundamentally shifted investor thinking over the past 12 months.
Wall Street fell sharply overnight after a resilient final estimate of third-quarter US gross domestic product and other data fuelled worries that the Federal Reserve would keep hiking interest rates for longer than feared.
Oil prices rose on expectations of a drop in Russian crude supply, helping to offset worries of a hit to US transport fuel demand as a pending deep freeze Arctic storm threatens travel during the Christmas holiday season.
China stocks were little changed, while Hong Kong stocks fell as China grapples with soaring COVID-19 infections, in the wake of Beijing dismantling its strict zero-Covid policy to contain the virus.
* Japan inflation
Recent data released showed Japanese inflation hitting a 41-year high. This reinforced expectations that the country’s central bank will lift interest rates next year.
Investors have been on a rollercoaster ride this month with slowing inflation and an easing of monetary policy hikes offset by central bank warnings that borrowing costs will likely have to go higher than expected.
Those worries were increased by the Bank of Japan’s shock decision this week to move away from its ultra-loose monetary policy, increasing bets on an even more restrictive investment environment in 2023.
* Rupee falls
The rupee declined by 7 paise to close at 82.86 (provisional) against the US dollar on Friday due to firm crude oil prices and steep losses in domestic stocks amid growing concerns about interest rate hikes.
Analysts said investors are concerned that strong US economic data will lead the Federal Reserve to double down on its interest rate hikes to control inflation.
(With inputs from agencies)