The financial markets were roiled by Brexit fears on Thursday as worried investors pulled out of risky assets.
Indian benchmark BSE Sensex tanked almost 355 points and the NSE Nifty 120 in mid-session trades on Thursday due to profit-booking by investors after Wednesday's gains amid weak global cues.
The 30-share barometer declined more than 1.5 percent to 26,357.55 with sectoral indices banking, teck, auto, IT, capital goods and metal, leading the fall. The index had gained 330.63 points in the last session.
The NSE Nifty was also trading lower by nearly 1.5 percent, at 8,086.95.
Brokers said apart from profit-booking in yesterday's gainers, weak trend in other Asian bourses as US Federal Reserve Chair Janet Yellen highlighted concerns about Britain's upcoming vote on whether to exit the European Union, mainly dampened the sentiment.
The Federal Reserve has left interest rates on hold. In the Asian region, Japan's Nikkei shed 1.10 percent, while China's Shanghai Composite Index fell 0.27 percent in early trade today. Hong Kong's Hang Seng was down 1.89 percent.
The Dow Jones Industrial Average ended 0.20 percent lower in Wednesday's trade.
The rupee also pared early gains, slipping 5 paise against the dollar to 67.20 following fresh bouts of dollar demand from importers and banks amid lower domestic equities.
The rupee opened higher by 67.12 against Wednesday's closing level of 67.15 at the Interbank Foreign Exchange (Forex) market here today.
Later, it hovered between 67.12 and Rs 67.23 during morning deals, before quoting at 67.21 at 1030 hrs.
Meanwhile, the dollar index was down 0.30 percent at 94.31 against the basket of six global currencies. Overseas, the US dollar was on defencive against its major rivals in early Asian trade, while sliding to a 21-month low against the yen after the Bank of Japan held off from expanding its monetary stimulus.
The greenback was already under pressure after the US Federal Reserve lowered its economic growth forecasts and scaled back its rate hike projections.