A strong bear grip on bourses led frontline indices to drop by nearly 3 per cent around noon on Friday after a global selloff triggered by an overnight sharp rise in US 10-year bond yields.
Investors feared foreign outflows as bond yields are inversely proportional to equity returns. When bond yields rise, equity markets generally underperform.
At 12 noon, the BSE S&P Sensex was down by 1,455 points or 2.85 per cent at 49,584 while the Nifty 50 tumbled by 403 points or 2.67 per cent to 14,694.
Except for Nifty pharma, all sectoral indices at the National Stock Exchange were in the red with Nifty private bank down by 4.6 per cent, PSU bank by 4 per cent and financial service by 4.5 per cent.
Among stocks, ICICI Bank slipped by 4.9 per cent to Rs 597.10 per share. HDFC Bank ticked lower by 4.7 per cent, Axis Bank and IndusInd Bank by 4.4 per cent each and Kotak Mahindra Bank by 4 per cent.
The other major losers were Bajaj Finance, Bajaj Finserv, HDFC, JSW Steel and Mahindra & Mahindra. However, Maruti Suzuki gained by 0.3 per cent. Pharma majors Dr Reddy's and Sun Pharma were up by 0.7 per cent and 0.8 per cent respectively.
Meanwhile, Asian stocks skidded to one-month lows as a rout in global bond markets sent yields flying and spooked investors amid fears the heavy losses suffered could trigger distressed selling in other assets.
MSCI's broadest index of Asia Pacific shares outside Japan slid by 2.4 per cent to a one-month low while Japan's Nikkei shed 3.85 per cent.
Hong Kong's Hang Seng dipped by 3.12 per cent and South Korea's Kospi cracked by 2.88 per cent. The Shanghai composite index was down y 2.11 per cent.