Mumbai, (IANS) Indian equities tumbled sharply on Thursday after the army said it conducted surgical strikes on terror camps along the Line of Control (LoC) in Jammu and Kashmir, inflicting "significant casualties".

The barometer 30-scrip sensitive index (Sensex) of the BSE, which was ruling strong in the morning after the unexpected production cuts agreed to by oil producing countries, took a fall of more than 500 points after the relevant briefing by the Indian Army.

However, value buying arrested the steep falls and led to a bounce back. Nonetheless, speculative selling, profit booking and derivatives expiry dynamics again dragged the key indices lower during the late-afternoon trade session.

The key index, which opened at 28,423.14 points, was quoting at 27,848.21 points (at 3.00 p.m.) -- down 444.60 points or 1.57 per cent from the previous close at 28,292.81 points.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) slipped by 147.65 points, or 1.69 per cent, to 8,597.50 points.

The Sensex has so far touched a high of 28,475.57 points and a low of 27,719.92 points during the intra-day trade.

The BSE market breadth fell prey to the bears -- with 2,350 declines and 348 advances.

On Wednesday, the benchmark indices had ended in the positive territory, as short covering, along with value buying and fresh inflow of foreign funds, kept the sentiments buoyed.

The barometer index had risen by 69.11 points or 0.24 per cent, while the NSE Nifty had edged up 38.75 points or 0.45 per cent.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty and Bank Nifty traded down on heavy selling pressure.

"IT stocks witnessed some recovery at lower levels tracking firm USD/INR futures prices. Banking, pharma and auto stocks traded down on selling pressure," Desai said.

"Aviation stocks traded down tracking higher crude oil prices. Oil-gas, textile and FMCG stocks also traded down on over all selling pressure in the market."