The Sensex and the Nifty ended at their lowest level in 20 months on Thursday due to risk aversion as crude oil resumed its slide and put pressure on Asian markets.
The benchmark BSE index ended 99.83 points or 0.41 per cent lower at 23,962.21, its lowest close since May 15, 2014.
The broader NSE index ended 32.5 points or 0.44 per cent lower at 7,276.80, its lowest close since May 30, 2014.
Among BSE sectoral indices, auto index fell the most by 1.86 per cent, followed by oil & gas 1.54 per cent, healthcare 1.53 per cent and FMCG 1.41 per cent. On the other hand, banking index was up 1.34 per cent, followed by IT 0.72 per cent, TECk 0.51 per cent and realty 0.5 per cent.
Top five Sensex gainers were Axis Bank (+5.21%), Wipro (+1.58%), Infosys (+1.32%), State Bank of India (+1.24%) and Tata Steel (+1.23%), while the major losers were Maruti (-4.11%), Dr Reddy's (-3.86%), Tata Motors (-3.7%), Coal India (-3.24%) and Sun Pharma (-2.59%).
International benchmark Brent was down 30 cents at $27.58, after hitting its lowest since 2003 in the previous session, over concerns that a weakening global economy would hit demand at a time of oversupply.
Still, domestic managers are optimistic that India's economy is relatively better placed to withstand any global market shocks, and believe investors would return to domestic equity markets.
"This is would be the best time to shift into equity as an asset class from a long-term perspective," said Arun Gopalan, vice-president of research at brokerage firm Systematix Shares and Stocks.
Meanwhile, foreign portfolio investors sold shares worth Rs 1,324.69 crore yesterday, as per provisional data.
European shares and oil prices held steady at multi-year lows on Thursday after a torrid two days that has wiped trillions of dollars off global markets.
A 3-per cent slump in Chinese stocks had given Asia another bruising, so there was relief as early 0.2-0.4 per cent gains for London's FTSE, Germany's DAX and France's CAC 40 pulled markets out of their nosedive.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped again and Japan's Nikkei average closed 2.4 per cent weaker after having initially risen in the morning session on Thursday.