Tracking trends on SGX Nifty and taking cues from Asian market, the domestic equity benchmarks dropped nearly 1% in the opening trade on Thursday. The broader Nifty slipped below the 16,000-mark and the Sensex shed around 600 points. The two indices opened at 16,021.10 and 53,608.35 respectively, only to slip further soon after opening. 

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In the broader market, Nifty midcap and small cap dropped more than 1% each as India VIX went past 23-mark. 

"Inflation continues to be a major headwind for markets. Consumer inflation in the US in April coming at 8.3% reinforces market's concern about aggressive rate hikes by the Fed and the possibility of a US recession in 2023," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

With dollar index at 104 and expected to strengthen further, FIIs are likely to continue selling till Indian valuation becomes attractive, said the expert. The expert was of the view that even though DII buying is more than FII selling now, bit it is not enough to lift sentiments in the market since the macro headwinds are strong.

"Market's preference for value over growth is reflected in the strength of high quality banking stocks which are even now at buyable valuations," he added.

In the pre-open, the Sensex tanked by more than 600 points or over 1% as Nestle India gained, one stock remained unchanged and rest slipped in the red on the 30-share index.  

"Though Nifty broke the low of last three sessions, it managed a smart pull-back once it approached the psychological 16,000-mark," said Viraj Vyas, Technical and Derivatives analyst at Ashika Broking. 

Looking at the intraday recovery and skewness of risk-reward in short positions, a pull-back is likely in the offing towards 16,400- 16,600-zone, which is the near-term resistance, while support is seen at 15,800-16,000, he added.  

Meanwhile, on Thursday, Asian markets declined in the early trade as Japanese Nikkei 225 was down 0.9%, Hang Seng Index at the Hong Kong Exchange dropped 1% and Chinese Shanghai Composite was trading with a 0.3% cut around 8.30 am.  

SGX Nifty hinted at another weak opening for the Indian market as the Futures index on the Singaporean Exchange dropped more than 150 points in the early trade on Thursday. 

On Wednesday, inflation fears forced the US market to close in the red. US equity benchmarks Dow Jones slipped more than 300 points to end at its 15-month low, While Nasdaq closed with nearly 400 points cuts to end at its 18-month low. Similarly, S&P 500 declined by 66 points or 1.65%.