Equity benchmark Sensex plunged 871 points on Wednesday due to across-the-board selling amid a negative trend in global markets.
The 30-share BSE index ended 871.13 points or 1.74 per cent lower at 49,180.31.
While the broader NSE Nifty declined 265.35 points or 1.79 per cent to 14,549.40.
M&M was the top loser in the Sensex pack, shedding around 4 per cent, followed by SBI, ICICI Bank, Axis Bank, IndusInd Bank, ITC and NTPC.
Bucking the overall trend, Asian Paints and PowerGrid closed with gains.
"Domestic equities fell sharply on weak global cues and continued apprehensions among investors from surge in coronavirus cases in the country,” said Binod Modi, Head Strategy at Reliance Securities.
Further, a sharp rebound in dollar index aggravated concerns despite dip in US bond yields and crude prices, he added.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul plunged up to 2 per cent.
Stock exchanges in Europe were also trading on a negative note in mid-session deals.
Meanwhile, the global oil benchmark Brent crude was trading 2.78 per cent higher at USD 62.48 per barrel.
