MUMBAI (NewsRise) -- India shares tumbled Thursday, as global slowdown concerns deepened and a renewed slide in European banking stocks worsened market volatility. Growing anxiety over bad debt at India's state-run banks further accelerated losses on indexes.
A slew of the nation's state-owned lenders, including State Bank of India, reported deteriorating asset quality and higher provisioning for bad loans, with some swinging to losses for the October-December quarter.
The benchmark BSE Sensex ended 3.4% lower at a fresh 20-month low of 22,951.83 points Thursday, chalking its biggest single-session decline since August 24, 2015. Global growth concerns, an ongoing global equity rout and tepid October-December earnings have driven a 12% decline on the Sensex this year so far. The broader NSE Nifty 50 Index declined 3.32% to 6,976.35 points.
Most sectors witnessed sharp losses Thursday, with indexes of financial stocks, information technology, capital goods and autos slumping over 3%. Drugmakers Dr. Reddy's Laboratories and Cipla were the only stocks on the Sensex to close higher.
European markets declined 3.5% Thursday, with the leading index for banking shares slipping more than 6%. U.S. stock futures were 2% lower.
Federal Reserve Chair Janet Yellen on Wednesday highlighted risks to U.S. economic growth stemming from deteriorating global financial conditions. The central bank's reiteration of its plan to raise rates gradually did little to soothe investor confidence.
This year's massive worldwide equity selloff and mounting global growth worries have pushed back expectations of future rate increases by the Fed, which raised rates for the first time in almost a decade last December.
Gold prices and the Japanese yen rose over 2% and 1.8% Thursday as investors flocked to safe-haven assets.
In Asia, Hong Kong's Hang Seng and South Korea's KOSPI, reopening after an extended Lunar New Year break, slid 3.8% and 2.9% Thursday. China and Taiwan remain shut for the week, while Japan was closed for National Founding Day.
"Today's sharp decline and increase in volatility will further hurt domestic investor sentiment, already affected by the deepening slump in global financial markets," said Vinod Nair, Head of Fundamental Research at Geojit BNP Paribas Financial Services.
On the Sensex, 28 of the 30 constituents ended lower, while overall declining issues outnumbered advancing ones 2,359 to 324 and 96 closed unchanged.
State Bank of India slid 3% to 154.20 rupees after it reported third-quarter profit that missed expectations. The banking behemoth's net profit fell 62% year-on-year to 11.15 billion rupees on higher provisions for non-performing assets.
A number of public sector lenders have reported losses after higher loan loss provisioning in the fiscal third quarter, as the Reserve Bank of India seeks to clean up the nation's banking system.
Private lenders ICICI Bank and HDFC Bank slipped 3.77% to 199.35 rupees and 3.73% to 976.05 rupees.
Mortgage provider Housing Development Finance Corp fell 4.37% to 1,067.95 rupees.
India's top carmaker Maruti Suzuki India fell 3.85% to 3,541.15 rupees. Analysts cautioned that an extended slump in equity prices will hurt consumer discretionary stocks as demand recedes.
Truck maker Tata Motors slipped 5.55% to 275.65 rupees. The company reported a 2% slide in quarterly earnings late Thursday afternoon.
Mahindra & Mahindra, maker of sports utility vehicles, declined 4.9% to 1,126.00 rupees.
Among the infrastructure stocks, Adani Ports & Special Economic Zone and Larsen & Toubro fell 6.9% to 188.50 rupees and 2.7% to 1092.30 rupees. Bharat Heavy Electricals fell 6% to 120.35 rupees ahead of its third quarter earnings later Thursday.
The broad-based decline weighed on information technology stocks and index heavyweights ITC and Reliance Industries.
Infosys and Tata Consultancy Services declined 2.7% to 1,081.15 rupees and 3.3% to 2196.05 rupees. ITC and Reliance Industries slipped 3.3% to 298.70 rupees and 4.1% to 922.45 rupees.
Dr. Reddy's Laboratories rose 0.01% to 2887.00 rupees. The drugmaker informed the exchanges Thursday that it will consider a share buyback at its board meeting on February 17. It rose as much as 3% earlier Thursday.
Cipla was the only other stock in the Sensex to close higher, gaining 0.4% to 541 rupees.