Thursday was yet another frightening day for investors as a spike in US bond yields coupled with firm crude prices and a depreciating rupee sent the Sensex plummeting to depths not seen in over eight months.

Even as the benchmark index collapsed over 806 points, the carnage saw investor wealth eroding by Rs 3,31,608 crore.

The stock markets have been on a slippery ground because of rising crude prices and the falling rupee. To add to its woes, yields on the benchmark 10-year US government bonds rose to its highest in over seven years, crossing the 3.20-per-cent-mark. The development led to fears of FPI (foreign portfolio investor) outflows from emerging markets such as India.

While Asian markets were also hit as a result, for the domestic investors, rising crude oil prices created fresh worries. Brent crude surpassed the $86-per-barrel mark, leading to concerns about its impact on inflation and current c deficit.

The Union government also announced a cut in prices of petrol and diesel to the tune of Rs 2.50 per litre. Of this Re 1 will be borne by the oil marketing companies (OMC). Concerns that the move will have an adverse impact on their bottomline led to their shares slumping up to 12 per cent.

On the BSE, the 30-share Sensex, which opened weaker at 35820.53, slumped to a day’s low of 35022.12 following a sharp plunge in healthcare, IT, oil & gas, banking and auto stocks. The index later settled at 35169.16 — a fall of 806.47 points, or 2.24 per cent. This is the lowest closing since July 2 when the index had settled at 35264.41.

The gauge had lost 550.51 points on Wednesday. Including Thursday’s fall, more than Rs 5 lakh crore has been wiped out from investors’ wealth.

The 50-share NSE Nifty also cracked the 10600-level by falling 259 points, or 2.39 per cent, to close at 10599.25 after hitting a low of 10547.25.

Thursday’s fall was not confined to heavyweights alone with the BSE mid-cap and small-cap indices dropping by 1.93 per cent and 2.07 per cent, respectively.