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Indian equity benchmark Sensex Wednesday plummeted over 363 points, tracking global markets which kicked off the new year on a sluggish note due to China slowdown concerns.
Disappointing Chinese economic data and weak auto sales number played out as dominant factors in triggering sell-offs in metal and auto stocks on domestic bourses.
After New Year holiday, world stocks Wednesday opened with an anxiety related to China slowdown, pulling most global bourses significantly down.
Back home, the 30-share BSE index after cracking over 500 points in the early session pared some losses towards the fag-end and finished lower by 363.05 points, or 1 per cent, at 35,891.52.
Similarly, the broader NSE Nifty plunged 117.60 points, or 1.08 per cent, to settle at 10,792.50.
The biggest losers in the Sensex pack were Vedanta, Tata Steel, M&M, Tata Motors, Maruti, Hero MotoCorp, PowerGrid, Bharti Airtel, SBI and Coal India -- falling up to 4.48 per cent.
Among the winners were Sun Pharma, TCS, Asian Paints, Infosys, Yes Bank and ICICI Bank -- rising up to 1.66 per cent.
Sectorally, auto and metal indices took the worst hit, falling over 3 per cent.
Auto stocks plunged on weak domestic passenger vehicle sales numbers, which continued to be in a slow lane in December with major players reporting either marginal increase or decline in offtake during the month on account of adverse macro-economic conditions.
Meanwhile, the Indian rupee fell sharply against the US dollar, hitting a low of 70.06 against the US dollar in the afternoon trade, down 63 paise.
Brent crude futures dropped 1.25 per cent to USD 53.12 per barrel.
Analysts said that weak GST collections and concerns around fiscal budget targets also added to investor concerns and as a result, the rupee was one of the worst performing emerging market currencies with 0.9 per cent fall.
Goods and service tax collections dropped to Rs 94,726 crore in December 2018, lower than Rs 97,637 crore collected in the previous month.
Traders were also tracking PMI data, which revealed that the country's manufacturing sector activity in December slowed down from the previous month.
The Nikkei India Manufacturing Purchasing Managers' Index eased to 53.2 in December, from 54, in November.
On a net basis, foreign portfolio investors (FPIs) sold shares worth Rs 48.19 crore Tuesday, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 142.58 crore, provisional data available with the BSE showed.
Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas, said, "In the near term, movement in crude oil, currency and Q3FY19 earnings starting from next week will decide the trend of the market."
Elsewhere in Asia, Korea's Kospi ended 1.52 per cent lower, while Hong Kong's Hang Seng fell 2.77 per cent and Shanghai Composite Index slipped 1.15 per cent.
In Europe, Paris CAC cracked 1.95 per cent, while Frankfurt's DAX fell 0.76 per cent. London's FTSE fell 1.28 per cent. Japanese market was closed on Wednesday.
Global investor sentiment took a beating as trading resumed Wednesday post New Year break, after Chinese economic growth sank to a low of 6.5 per cent in the September quarter over a year-ago period.
