Domestic equities, which opened after two days of closure, retreated sharply in early Thursday trade joining other Asian market peers, as fresh worries of a US rate hike came to the fore in the minutes of recent policy meet that was announced a day before.
Lingering in negative territory since the opening bell, the benchmark Sensex plunged deep into the red to slip below the crucial 28,000 level as investors cut their position in select banking, auto and IT stocks.
The index tumbled 280 points to touch a low of 27,801.65 before erasing some losses to trade at 27,831.65, down 250.69.50 points, or 0.89 percent over previous close.
Similarly, the broader 50-stock CNX Nifty, too, fell sharply and was down 74.50 points or 0.86 percent at 8,634.30.
As per the US Fed minutes of the last month's policy meet, several policymakers showed their intent for a rate hike in the next policy meet on the ground that the US economy would maintain upward momentum.
Besides local markets, other Asian stock indices, too, were weak falling around a percent each.
Among the laggards in Sensex space, Tata Motors dropped 2.4 percent to Rs 548.50, IT major TCS shed nearly 2 percent to Rs 2,333.85 ahead of its second quarter earnings to be announced later in the day.
other losers such as HDFC dropped 2.3 percent to Rs 1,369.10, Adani Ports fell 2.3 percent to Rs 258, ICICI Bank eased 2.1 percent to Rs 244.95 and HDFC Bank was down 1.5 percent at Rs 1,265.40. Shares of Reliance Industries, Dr Reddy's, Axis Bank, Bajaj Auto and SBI were down over a percent each.
However, shares of ONGC bucked the trend, rising 2.7 percent to Rs 274.80, while Infosys gained 1.8 percent to Rs 1,048 and Cipla was up 1.2 percent at Rs 587.75.