Benchmark indices fell sharply in trade, as global markets were weak, following a surge in US bond yields.
A rise in bond yields tends to affect emerging market equities, as there is a capital outflow from foreign portfolio investors (FPIs). In fact, FPIs sold a staggering sum of Rs 16,000 crores in the cash market in November.
IT stocks like Infosys, lost ground, as the tech heavy NASDAQ saw huge losses in trade. Telecom stocks continued to remain weak, following the announcement that Reliance Jio would continue to extend its freebies until March 31, 2016. Idea Cellular plunged 2 per cent, while Bharti Airtel and Reliance Communications were also weak in trade.
The broader markets also declines along with the Sensex and the Nifty stocks with the midcap index falling by almost 1 per cent. Sun TV and Century Textiles were the biggest losers from the space.
Shares in Coal India gained after reports that the government was looking at the possibility of breaking-up the company. The stock was up 1 per cent in trade. Among non index stocks, Jindal Drilling was down 1 per cent, after an arbitration award was passed against the company.
Meanwhile, the rupee was trading at 68.37 to the US dollar.