Benchmark indices continued their downtrend for the fifth session on the trot on Thursday, with the Sensex tumbling nearly 817 points in early trade, tracking weak global trends and selling in index majors Reliance Industries and HDFC Bank.
Unabated selling by foreign institutional investors also weighed on the sentiment.
The 30-share BSE Sensex was trading 816.78 points lower at 53,271.61. The NSE Nifty declined 234.05 points to 15,933.05.
From the Sensex firms, UltraTech Cement, Tata Steel, Bajaj Finance, M&M, IndusInd Bank, HDFC Bank, Bajaj Finserv and Larsen & Toubro were among the major laggards.
In contrast, Power Grid emerged as the only gainer.
Elsewhere in Asia, markets in Tokyo, Hong Kong and Seoul were trading lower, while Shanghai quoted marginally higher.
Stock exchanges in the US had ended lower on Wednesday.
"Asian stocks fell Thursday after elevated US inflation bolstered the case for aggressive monetary tightening and sparked a slide on Wall Street," said Deepak Jasani, Head of Retail Research, HDFC Securities.
Meanwhile, international oil benchmark Brent crude declined 1.19 per cent to $106.22 per barrel.
Continuing their selling spree, foreign institutional investors offloaded shares worth Rs 3,609.35 crore on Wednesday, according to stock exchange data.
In the previous trade, the BSE Sensex ended at 54,088.39, lower by 276.46 points or 0.51 per cent. The NSE Nifty dipped 72.95 points or 0.45 per cent to settle at 16,167.10.
"Indian markets are seeing turbulent swings as investors continue to be concerned about rising interest rates, fears about slowing economic growth, and additional tightening measures in China," said Mohit Nigam, Head - PMS, Hem Securities.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, inflation continues to be a major headwind for markets.
"Consumer inflation in the US in April coming at 8.3 per cent reinforces market's concern about aggressive rate hikes by the Fed and the possibility of a US recession in 2023," he added.
Even though domestic institutional investors (DII) buying is more than foreign institutional investors (FII) selling now, that is not enough to lift sentiments in the market since the macro headwinds are strong, Vijayakumar said.