Benchmark indices declined in early trade on Thursday, falling for the fifth straight session, amid concerns that the US Federal Reserve might raise interest rates further to curb inflation.
Fresh foreign fund outflows and a mixed trend in the US market also hit investor sentiments.
In initial trade, the BSE Sensex declined 92.7 points to 59,652.28 points while the NSE Nifty slipped 34.5 points to 17,519.80 points.
As trading progressed, both the indices fell further. The Sensex tumbled 279.27 points to 59,465.71 points while the Nifty quoted 60.80 points lower at 17,493.50 points.
In the Sensex pack, Asian Paints, Bajaj Finserv, IndusInd Bank, Bajaj Finance, Titan, HDFC Bank, Infosys, HDFC Reliance Industries and Kotak Mahindra Bank were the major laggards.
HCL Technologies, Tata Consultancy Services, Tech Mahindra, Tata Steel, UltraTech Cement and Sun Pharma were among the gainers. In Asian markets, South Korea, China and Hong Kong were trading higher.
The US markets ended on a mixed note on Wednesday.
"The Federal Open Market Committee (FOMC) minutes reveal the fact that some have even argued for a 50 basis points rate hike. This is the biggest near-term negative for equity markets globally," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
On Wednesday, the Sensex plunged 927.74 points or 1.53 per cent to settle at 59,744.98 points while the Nifty dropped 272.40 points or 1.53 per cent to end at 17,554.30 points.
International oil benchmark Brent crude climbed 0.45 per cent to USD 80.96 per barrel.
Foreign Portfolio Investors (FPIs) offloaded shares worth Rs 579.82 crore on Wednesday, according to exchange data.