Domestic stock markets plunged on Wednesday to hit a fresh 20-month low as sell-off in other Asian markets weighed on investor sentiment.
The BSE S&P Sensex fell sharply by 406 points to trade at 24,073 points, while the 50-share Nifty dropped to 7,322, down 113 points.
Asian markets tumbled again on the back of falling crude oil prices, with Hong Kong's Hang Seng index and Japan's Nikkei plummeting by 3.7% and 3.1% respectively. Chinese stock markets also fell 1.3%, despite hopes of imminent policy stimulus by the country's authorities.
Crude oil prices continued to trade at 12-year low, with the benchmark Brent oil prices trading $28.51 a barrel, down 25 cents. The recent fall in oil prices to below $30 a barrel was mainly led by intensifying concerns over worsening global supply glut.
Last week, Western sanctions over Iran's nuclear programme were lifted, allowing the country to start exporting its oil, which is expected to put further pressure on the oil prices.
"(Iran) is really another strike in the same beating the market has taken," Michael McCarthy, chief market strategist at Sydney's CMC Markets, told Reuters.
Meanwhile, banking, realty and energy stocks traded lower on the BSE, while the sell-off was seen across all the sectors.
Reliance Industries' strong results for the December quarter failed to lift its stocks and RIL shares were down 2.5% to trade at Rs 1,017. The Mukesh-Ambani-led group posted a record profit of Rs 7,290 crore in the third quarter of the current fiscal year.
The sharp sell-off in the stock markets also hit the rupee as it fell to 67.77 against the US dollar compared to previous close of 67.65.