Equity markets buckled under selling pressure on Monday as an intense sell-off emerged following hawkish comments from the US Federal Reserve that knocked 861 points off the benchmark index and Rs 2.39 lakh crore investor wealth.

While the BSE Sensex tanked 861.25 points, or 1.46 per cent, to settle at 57972.62 after crashing 1466.4 points, or 2.49 per cent, to 57367.47 during intra-day trades, the NSE Nifty fell 246 points, or 1.4 per cent, to 17312.90.

The nervousness came after Jerome Powell warned of more interest rate increases to control inflation at the Jackson Hole symposium last Friday.

More importantly, he indicated that the US central bank was willing to accept a slowdown in its economy, and the key focus right now is to tame inflation.

His comments have reignited fears that it would again raise rates by 50 basis points at the next meeting in September.

Experts added that the domestic sentiment was affected by worries that the latest developments could derail the pick-up in investments by foreign portfolio investors (FPIs).

Provisional data showed FPIs were net sellers to the tune of Rs 564 crore on Monday. Powell’s comments had led to a sell-off in global markets with key indices falling up to 2.66 per cent.

“Global stocks fell, treasury yields climbed and global currencies lost ground against the dollar as investors took fright following hawkish comments from some of the world’s most powerful central banks.”

“European Central Bank board member Isabel Schnabel has warned over the weekend that central banks must now act forcefully to combat inflation, even if that drags their economies into recession,’’ Deepak Jasani, head of retail research, HDFC Securities, said.