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The Sensex and Nifty declined more than 1 per cent on Tuesday, snapping four consecutive sessions of gains, as escalating worries around North Korea added to the volatility ahead of local derivatives contracts expiry this week.
Both indexes had marked their biggest intraday percentage fall in nearly nine months during the session.
In a sharp escalation of tensions on the Korean peninsula, North Korea fired a missile early on Tuesday that flew over Japan and landed in Pacific waters about 1,180 kilometres (735 miles) off the northern region of Hokkaido.
The 30-share BSE index Sensex ended lower by 362.43 points or 1.14 per cent at 31,388.39 and the 50-share NSE index Nifty closed down by 116.75 points or 1.18 per cent at 9,796.05.
All BSE sectoral indices ended in the negative zone. Among them, infrastructure index fell 1.86 per cent, followed by power 1.56 per cent, consumer durables 1.47 per cent and PSU 1.24 per cent
Major Sensex losers were NTPC (-2.8%), Sun Pharma (-2.35%), HDFC (-2.2%), Reliance (-2.17%) and Coal India (-2.1%), while the only two gainers among 30-share Sensex constituents were M&M (+0.25%) and Wipro (+0.02%).
Gainers, losers
Power producer NTPC Ltd was the biggest loser on both the indexes. The stock ended down by nearly 3 per cent after the Union Government said it would sell a 5 per cent stake in the company with an option to sell 5 per cent more through a two-day stock market auction in a potential $2.2 billion deal.
Meanwhile, Infosys Ltd shares fell nearly 1.5 per cent on profit-booking after having risen nearly 8 per cent in the last four sessions.
The stock had gained more than 3 per cent in the previous session, with co-founder Nandan Nilekani returning as chairman after the shock resignation of chief executive Vishal Sikka last week.
Shares in A CC Ltd, Bank of Baroda and Tata Power Co Ltd dropped after their exclusion from the NSE index.
Meanwhile, Reliance Infrastructure Ltd surged 7.7 per cent on reports that renewable energy firm Greenko is in talks to buy the company's electricity business in Mumbai.
F&O expiry
The missile firing added to the unease in domestic markets that were already cautious ahead of the monthly derivatives contracts expiry on Thursday.
“Early negativity from Asian markets over North Korea followed through to the domestic market,” said Anand James, chief market strategist with Geojit Financial Services.
“Investors are also booking profits after Nifty tested 9,900 levels on Monday while there is some volatility ahead of the expiry,” he added.
Asian shares
S&P mini futures fell as much as 0.85 per cent on the news before paring losses to trade 0.5 per cent below its close on Monday, when it was little changed. Japan's Nikkei fell 0.7 per cent to four-month low while South Korea's Kospi shed 0.5 per cent, helping to drag down MSCI's broadest index of Asia-Pacific shares outside Japan 0.3 per cent.
US stocks
The S&P 500 and Dow had ended little changed on Monday, with energy and bank shares lower as Tropical Storm Harvey crippled the US energy hub in Texas, while tech and healthcare gave a light boost to the Nasdaq.
The Dow Jones Industrial Average fell 5.27 points, or 0.02 per cent, to close at 21,808.4, the S&P 500 gained 1.19 points, or 0.05 per cent, to 2,444.24. The Nasdaq Composite added 17.37 points, or 0.28 per cent, to 6,283.02 helped by rises in Apple and Gilead Sciences.
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