Equity benchmark Sensex declined 290 points in a volatile session to settle below the 58,000 mark on Thursday due to a sell-off in banking, financial and IT stocks amid a weak trend in European equities.
Besides, heavy selling pressure in index heavyweight Reliance Industries added to the pressure, traders said.
After rallying for the two straight days, the 30-share BSE Sensex fell 289.31 points or 0.50 per cent to settle at 57,925.28. During the day, it declined 375.74 points or 0.64 per cent to 57,838.85.
The broader NSE Nifty dipped 75 points or 0.44 per cent to end at 17,076.90.
State Bank of India was the biggest loser in the Sensex pack, shedding 1.69 per cent, followed by Asian Paints, Kotak Mahindra Bank, HCL Technologies, Reliance Industries, Wipro, IndusInd Bank, Infosys, Power Grid and HDFC twins.
In contrast, Nestle, Maruti, Bharti Airtel, Tata Motors, ITC and Hindustan Unilever were among the gainers.
In Asia, Seoul, Shanghai and Hong Kong markets ended in the green, while Japan settled lower.
Equity markets in Europe were trading in negative territory during the afternoon trade. The US markets had ended sharply lower on Wednesday.
"Although the Fed's decision to increase rates by 25 basis points was in line with expectations, concerns were raised by the US Treasury Secretary's statement that blanket insurance for all deposits was not being considered. The domestic market attempted to recoup its initial losses with the help of favourable US futures as the Fed hinted at its plan to pause rate hikes sooner. However, the recovery was short-lived due to a sluggish start in the European market led by a 50 bps hike by the Swiss National Bank," said Vinod Nair, Head of Research at Geojit Financial Services.
Meanwhile, global oil benchmark Brent crude dipped 0.90 per cent to $76 per barrel.
Foreign Portfolio Investors turned buyers on Wednesday as they bought equities worth Rs 61.72 crore, according to exchange data.