Indian markets plunged over 0.9 per cent at the closing session on Wednesday due to all-round selling by funds and retail investors due to > weak rupee despite firm European cues.

The rupee slumped 38 paise to trade at 60.42 against the dollar in the afternoon trade as escalating civil war in Iraq is leading to fears that India's import bill may go up with rising crude oil prices.

Brent rose to the highest level this week as fighting in Iraq damaged the northern energy infrastructure, while the main oilfields in OPEC’s second-biggest producer were spared. West Texas Intermediate also gained.

The 30-share BSE index Sensex plunged 274.94 points at 25,246.25 and the 50-share NSE index Nifty fell 73.5 points or 0.96 per cent to 7,558.20.

Among BSE sectoral indices, realty index plunged the most by 2.1 per cent, followed by consumer durables 1.59 per cent and power 1.51 per cent. Only healthcare index was up 0.06 per cent.

Among 30-share Sensex constituents, Cipla, Hindalco, GAIL, Dr Reddy's and Maruti were the major gainers, while the major losers were BHEL, TCS, Tata Steel, NTPC and ICICI Bank.

European shares rose as investors awaited the Federal Reserve's monetary policy decision today. Asian shares outside Japan ended lower.

The Fed meet will end with a statement at 1800 GMT, followed half-an-hour later by a news conference with Chair Janet Yellen.

The US central bank is largely expected to maintain its current policy of keeping federal funds rate at zero, and steadily cutting back its stimulus programme.

French bank Credit Agricole said investors will focus on the Fed’s projections for US economic growth, unemployment, inflation and the expected timing of any interest rate increase.

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