Bellwether indices on Thursday slumped over 2 per cent and the rupee crashed to a fresh record low as worries over worldwide inflation amid rising fears of recession in the US spooked investors.

The Sensex plummeted 1158.08 points or 2.14 per cent to end below the 53000 mark at 52930.31, while the broader Nifty 50 settled at sub-16000 levels after a 359.10 points fall to 15808.

The picture was not good at the forex markets as well as the rupee fell to a fresh historic intra-day low of 77.63 to the greenback after opening at 77.49.

It recovered some ground because of Reserve Bank of India (RBI) intervention and settled at 77.42 — a drop of 18 paise from the last close of 77.24 to the dollar.

Concerns over rising inflation and interest rates globally also drove down bond prices with yields on the benchmark 10-year paper rising to 7.24 per cent from the last close of 7.22 per cent.

Sentiments took a beating after the April inflation number in the US came in at 8.3 per cent. Though it was below the 8.5 per cent year-on-year rise in the preceding month, inflation was above market expectations of 8.1 per cent.

It raised fears that the US Federal Reserve will continue to take aggressive interest rate response which could further drive investors away from emerging markets and even lead to a likely recession in the US in 2023.

Investors were also on tenterhooks ahead of the release of April CPI inflation numbers for India.

Reflecting the uneasiness, the benchmark Sensex opened sharply lower at 53608.35 and hit a day’s low of 52702.30 — a fall of 1386 points and later settled with deep cuts at 52930.31. Wipro was the lone scrip in the 30-share pack which had a green tick as it closed with gains of 0.55 per cent.

Siddhartha Khemka, head — retail research, Motilal Oswal Financial Services, said that though the stock markets are now in an over-sold territory after witnessing sharp decline in the last few trading sessions, uncertainty may continue for some more time.

“Inflation continues to be a major concern for the markets. Weakening economic growth outlook, prolonged Russia-Ukraine war, volatility in commodity prices, continued FII selling and rising bond yields have dented investors’ sentiments.”

“The Nifty has corrected 15 per cent from its 52-week high. On the other hand, Nifty Midcap 100 and Smallcap 100 indices witnessed deeper cuts — down 19 per cent and 28 per cent from their respective highs – entering into a bear grip,’’ he added.

Market circles added with CPI inflation print for April coming at 8-year high of 7.79 per cent, stocks may face more pressure on Friday.