According to traders, Chief Economic Adviser Subramanian's comments practically ruling out a stimulus package for the economy weighed on investor sentiment.
Benchmark equity index Sensex plummeted 587 points on Thursday, pressured by heavy selling in banking and energy stocks amid weak global cues.
Investor sentiment also tanked after Chief Economic Adviser Krishnamurthy Subramanian virtually ruled out a stimulus package from the government.
The 30-share Sensex sank 587.44 points, or 1.59 per cent, to 36,472.93.
It hit an intra-day low of 36,391.35 and a high of 37,087.58.
The broader NSE Nifty ended 177.35 points, or 1.62 per cent, down at 10,741.35.
During the day, it plunged to a low of 10,718.30 and touched a high of 10,908.25.
Yes Bank was the biggest laggard in the Sensex pack, plummeting 13.91 per cent, followed by Vedanta, Bajaj Finance and Tata Motors, which declined up to 7.76 per cent.
ONGC, SBI, Hero MotoCorp, ICICI Bank, Tata Steel, HDFC twins and RIL also ended in the red.
Tech Mahindra, TCS, HUL and HCL Tech were the only gainers, spurting up to 1.57 per cent.
According to traders, Chief Economic Adviser Subramanian's comments practically ruling out a stimulus package for the economy weighed on investor sentiment.
"If we basically expect the government to use taxpayers' money to intervene every time when there are some 'sunsets', then I think you introduce possible moral hazards from 'too big to fail' and as well as the possibility of a situation where profits are private and losses are socialised," Subramanian said at an event.
Photograph: Shailesh Andrade/Reuters
