Equity benchmark Sensex tumbled 581 points on Thursday, in tandem with a global selloff after the US Federal Reserve signalled policy tightening from March.
The 30-share index ended 581.21 points or 1.00 per cent lower at 57,276.94. Similarly, the NSE Nifty plunged 167.80 points or 0.97 per cent to 17,110.15.
HCL Tech was the top loser in the Sensex pack, skidding over 4 per cent, followed by Tech Mahindra Dr Reddy's, Wipro, TCS, Titan and Infosys.
On the other hand, Axis Bank, SBI, Maruti and Kotak Bank were among the gainers.
The US Federal Reserve on Wednesday indicated that there is ample room to raise interest rates to fight inflation.
Investors fear foreign capital outflows from emerging markets like India after rate hikes in the US.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended sharply lower on the hawkish Fed stance.
Stock exchanges in Europe were also largely trading in the red in mid-session deals.
Rupee Slumps 30 Paise To 75.08 Against US Dollar
Registering its third straight session of loss, the Indian rupee on Thursday depreciated by 30 paise to close at 75.08 (provisional) against the US dollar, tracking the strength of the American currency after a hawkish US Fed policy stance.
Forex traders said muted domestic equities, sustained foreign fund outflows and firm crude oil prices also weighed on the local unit.
At the interbank foreign exchange market, the local currency opened at 75.18 against the greenback and witnessed an intra-day high of 75.07 and a low of 75.31 during the session.
The rupee finally settled at 75.08, down by 30 paise over its previous close.
On Tuesday, the rupee had closed at 74.78 against the US dollar.
The forex and equity markets were closed on Wednesday on account of Republic Day.
This is the third straight session of loss for the local unit, during which it has declined by 63 paise.
"Indian rupee depreciated against US dollar on massive risk-off sentiments after the US Fed's hawkish stance," said Dilip Parmar, Research Analyst, HDFC Securities.
Fed, as expected, indicated a rate hike in March. Consequently, the dollar rallied following higher treasury yields. At the domestic front, India 10-year benchmark bond yield surged to 6.74 per cent, the highest since 2019, Parmar added.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.33 per cent up at 96.79.
Brent crude futures, the global oil benchmark, dipped 0.01 per cent to USD 89.95 per barrel.
Foreign institutional investors remained net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 7,094.48 crore, as per exchange data.
Gold Plunges Rs 563; Silver Declines Rs 1,186
Gold in the national capital on Thursday plunged Rs 563 to Rs 48,215 per 10 grams amid weak international precious metal prices, according to HDFC Securities.
In the previous trade, the precious settled at Rs 48,778 per 10 gram.
Silver also tumbled Rs 1,186 to Rs 62,792 per kg from Rs 63,978 per kg in the previous trade.
In the international market, gold was trading lower at USD 1,810 per ounce and silver was flat at USD 23.10 per ounce.
"Gold prices traded down with spot gold prices at COMEX trading 0.45 per cent lower at USD 1,810 per ounce on Thursday. Gold prices declined following the US FOMC outcome," Tapan Patel, Senior Analyst (Commodities), HDFC securities, said.
Navneet Damani, Senior VP Commodities Research, Motilal Oswal Financial Services, said, "Gold inched lower after the FOMC policy meet which was in-line with the market expectations, as the Fed decided on March rate hikes that pushed up US Treasury yields and the dollar, while uncertainty over Ukraine capped bullion's losses."