Indian share prices plunged 2.24 percent Thursday in line with global weakness triggered by prospects of higher US interest rates, dealers said.
The Mumbai stock exchange's 30-share benchmark Sensex index dived 195.77 points to close at 8,528.70, one of the sharpest falls this year.
Turnover was a moderate 37.10 billion rupees (847 million dollars) as 1,923 stocks declined while 583 gained.
"All the regional markets are down and our market is no exception," said Hemen Kapadia, partner at investment advisory firm Morpheus Inc.
"The selling was entirely in line with the global weakness on concerns that interest rates will rise in the US."
But dealers said shares of India's software index heavyweights were expected to rebound in the next few days ahead of second quarter to September results.
Most of the selling Thursday was in Sensex heavyweights. There was moderate selling of small and mid-cap shares.
Foreign funds have invested a record nearly nine billion dollars in Indian equity markets since January 2005.
The biggest losing stocks were blue chips Hindustan Lever, software shares Wipro, Tata Consultancy and Infosys, cigarette major ITC, and Reliance Industries, India's largest private sector company.
Shares of consumer goods giant Hindustan Lever fell 3.12 percent or 5.65 rupees to 175.30, Tata Consultancy shed 4.84 percent or 20.55 rupees to 403.90, Infosys lost 1.02 percent or 26.90 rupees to 2,615.95, Wipro slid 3.62 percent or 14.65 rupees to 389.60, ITC tumbled 2.85 percent or 3.75 rupees to 127.75 while Reliance Industries slipped 1.38 percent or 11.10 rupees to 790.85.