Indian equity benchmarks the 30-pack Sensex and the broad-based Nifty continued to see strong selling on January 18, extending losses to a third session as all sectors traded in the red.

Sluggish global cues, sharp selling in frontline banks, and information technology stock together pulled down the market, a day after it had its worst day in 19 months.

At 10.30 am, the Sensex was down 449.57 points, or 0.63 percent, at 71,051.19 and the Nifty was down 162.70 points, or 0.75 percent, at 21,409.30. Laggards outnumbered gainers, as about 797 shares rose 2,262 fell, and 80 remained unchanged.

Selling was more intense in the broader market. The Nifty Midcap 100 slumped 1.5 percent and the smallcap 100 nearly a percent.

1 Rate-cut delay worries 

US Federal Reserve governor Christopher Waller's recent comments that a pivot in the monetary policy may come slower than anticipated continued to haunt investor sentiment.

Following the hawkish remarks, investors are now skeptical of the Federal Reserve pulling a trigger on rate cuts at its March meeting. Expectations are that the much-awaited cut will now be in June.

2 US bond yields and dollar index rise

As hopes of a rate cut in March begin to fade, the yields on the US benchmark 10-year treasury bonds bounced back to levels above 4 percent. Currently, the yields are firm at 4.09 percent.

The dollar index also rose to above 103 after hitting a one-month high in the previous session. The spike also negatively impacted metal stocks, which have been struggling with sharp cuts.

3 Sluggish global cues

A hawkish Fed and the yield spike dented investor sentiment across the globe, resulting in  subdued trade in most global markets. The three benchmarks in the US ended lower on January 17. The Dow Jones Industrial Average fell 0.3 percent and S&P 500 and NASDAQ 100 each closed 0.6 percent lower.

Australia's S&P ASX 200 was on course to end the fifth straight session in the red. Markets in Japan and South Korea traded flat.

4 Selling in frontline sectors 

Banking bellwether HDFC Bank, which also takes up the highest weightage on the Nifty 50 at over 13 percent, continued to see selling for a second day after its disappointing Q3 numbers. The stock was down over 2 percent, mounting pressure on the headline index.

The top five information technology stocks also traded in the red, with LTIMindtree crashing over 12 percent following a miss on its Q3 results.

5 Break below key levels 

The Nifty broke below its key support of 21,550, its 21-day moving average (DMA) which triggered more downside pressure for the index.

Analysts had warned that the sentiment would worsen if the Nifty drops below 21,550. "This may result in the index slipping to 21,350, while on the upside, resistance is likely to be seen at 21,650," Rupak De, Senior Technical Analyst, LKP Securities, said.