Equity benchmark Sensex plunged 600 points on Wednesday, tracking heavy losses in index majors Reliance Industries, HDFC Bank and ICICI Bank amid a massive selloff in European markets. Rising cases of coronavirus, the upcoming presidential elections in the US and a delay in a stimulus package in the US are also being touted as reasons behind the fall in the markets.
After hitting a low of 39,774.60 during the day, the 30-share BSE index ended 599.64 points or 1.48 per cent lower at 39,922.46.
Similarly, the broader NSE tanked 159.80 points or 1.34 per cent to close at 11,729.60.
IndusInd Bank was the top loser in the Sensex pack, shedding over 3 per cent, followed by HDFC, ICICI Bank, Tech Mahindra, Bajaj Finance, UltraTech Cement and Tata Steel.
On the other hand, Bharti Airtel was the top gainer, rallying more than 4 per cent, after the country's second largest telecom operator reported its highest-ever quarterly consolidated revenue, helping it narrow losses in the July-September period.
Consolidated revenue rose 22 per cent to Rs 25,785 crore in the September quarter, while net loss narrowed to Rs 763 crore. M&M, Maruti and L&T also ended with gains.
According to analysts, Indian equities faced intense selloff after European markets opened with heavy losses amid spiking COVID-19 cases.
Extremely volatility was also witnessed ahead of monthly derivatives expiry and US presidential election, they said.
Benchmarks in Europe plunged up to 3 per cent in early deals.
Bourses in Hong Kong and Tokyo ended on a negative note, while Shanghai and Seoul were in the positive territory.
Meanwhile, international oil benchmark Brent crude was trading 3.20 per cent lower at USD 40.28 per barrel.
The rupee too depreciated by 16 paise to settle at more than one-month low of 73.87 against the US currency on Wednesday due to month-end dollar demand from importers and the greenback's gains against major currencies.
Losses in domestic stock markets and uncertainty ahead of expected fresh stimulus measures also weighed on the investor sentiment.
At the interbank forex market, the rupee opened on a positive note at 73.70 against the greenback, but soon pared gains to touch an intra-day low of 73.93.
The local unit finally settled at 73.87, registering a decline of 16 paise over its previous close of 73.71. This is the lowest closing level since September 24 when the rupee had settled at 73.89.
"Indian rupee fell along with other Asian currencies following risk-off sentiments. Hopes of government decision to introduce more stimulus before the Diwali festival capped the rise," said Devarsh Vakil, Deputy Head Retail Research, HDFC Securities.
According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services: "Market participants are now waiting for more clarity on the stimulus package which is under consideration for quite some time now. For the next couple of sessions, we expect the rupee to quote with a negative bias and quote in the range of 73.40 and 74.05."
"The Indian rupee depreciated against the dollar as risk appetite waned following another wave of coronavirus infections in the US and Europe," said Sriram Iyer, Senior Research Analyst at Reliance Securities.