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Indian pedestrians walk on Dalal Street - Trader's Street - next to the Bombay Stock Exchange (BSE) in Mumbai on March 7, 2014.INDRANIL MUKHERJEE/AFP/Getty Images

A steep fall in index heavyweight ITC post the hike in cigarette cess, and to some extent Reliance Industries, not to mention a negative lead from Asian markets pushed the domestic market lower on Tuesday, Moneycontrol.com reported.

The BSE Sensex crashed nearly 450 points intraday, dragged entirely by index heavyweights ITC post hike in cigarettes cess.

At close, the 30-share BSE Sensex posted biggest single day loss in 2017, down 363.79 points or 1.13 percent at 31,710.99. The 50-share NSE Nifty shed 88.80 points or 0.90 percent to 9,827.15 after hitting intraday low of 9,792.05.

Moneycontrol quoted experts as saying that Tuesday's sharp fall was due to stock specific correction, which is unlikely to hit overall positive market sentiment, experts feel.

Shares of ITC plunged 12.6 percent after the GST Council on Monday raised the cess on cigarettes to take away an estimated Rs 5,000 crore annual 'windfall' manufacturers could have reaped from lower GST rates, the Economic Times said in a report, quoting Finance Minister Arun Jaitley.

The crash of the ITC stock happened amid high volumes as brokerage houses downgraded the stock after the GST Council's decision to raise cigarette cess on Monday. However, cigarette prices will not change as a result of the increased cess, which became effective Monday night.

According to the ET report, Morgan Stanley downgraded the stock to equal-weight from overweight and reduced target price to Rs 285 from Rs 395, saying it is a clear negative with obvious impact on volume growth and valuation multiples. It expects 3 percent volume decline in fiscal 2018 versus earlier estimate of 5 percent growth and expects 6 percent cigarette business EBIT growth versus 20 percent earlier.

The broader markets were also caught in bear grip, though they outperformed benchmarks. The BSE Midcap and Smallcap indices were down 0.6 percent each on weak market breadth. About 1,688 shares declined against 1,000 advancing shares on the exchange.

In the world markets, dollar fell to a 10-month low on Tuesday, bearing the brunt of a selloff triggered by another setback to US President Donald Trump's agenda and scaled back expectations for another rate hike at Federal Reserve this year.