Mumbai: Equity benchmarks surrendered early gains to end sharply lower Thursday as boiling crude prices and a depreciating rupee kept investor sentiment at a low ebb amid expiry of derivatives contracts.
Auto, metal, energy and financial stocks witnessed robust selling on concerns over valuation and earnings, traders said.
On the global front, crude oil prices surged past the USD 75 per barrel mark, sparking concerns over growth and macroeconomic stability.
After starting on a positive note, the indices succumbed to a sudden sell-off in the last half-hour of trade amid expiry of April futures and options contracts.
The BSE Sensex slumped 323.82 points, or 0.83 per cent, to close at 38,730.86, while the broader NSE Nifty declined 84.35 points, or 0.72 per cent, to 11,641.80.
Maruti Suzuki tumbled 2.23 per cent after the country's largest car maker reported a 4.6 per cent decline in net profit to Rs 1,795.6 crore for the March quarter.
Other losers in the Sensex pack included Tata Steel, Vedanta, SBI, Coal India, Tata Motors, Sun Pharma, HUL, RIL, IndusInd Bank, Axis Bank, HDFC, HDFC Bank, ICICI Bank, M&M, Kotak Bank and Infosys, falling up to 2.89 per cent.
Bharti Airtel, TCS and Bajaj Auto were the only gainers, spurting up to 1.06 per cent.
Domestic markets made new highs during the month but could not sustain there due to profit-booking at higher levels, analysts said.
"Crude remained in focus as Brent oil rose above USD 75 per barrel for the first time in 2019 due to suspension of Russian crude to Europe over quality concerns. Higher oil prices can have a negative impact on the current account deficit (CAD), the rupee, inflation and does not augur well for the domestic markets.
"General elections will keep the markets buzzing in the near term. However, the major factor that will decide the direction of the market is Q4FY19 earnings. A revival in earnings will help the markets sustain the current valuation," said Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas.
Sectorally, the BSE telecom index saw the biggest losses, falling 2.26 per cent; followed by metal, bankex, finance, auto, energy and teck.
In the broader markets, the BSE midcap and smallcap indices lost up to 0.58 per cent.
Brent crude futures, the global oil benchmark, rose 1.25 per cent to trade above the USD 75 per barrel mark.
The rupee depreciated 37 paise to 70.23 against the US dollar intra-day.
Meanwhile, foreign institutional investors (FIIs) purchased equity worth Rs 974.88 crore on Wednesday, while domestic institutional investors (DIIs) sold shares to the tune of Rs 657.06 crore, provisional data available with stock exchanges showed.
Elsewhere in Asia, benchmark equity indices in Shanghai, Tokyo and Seoul ended on a mixed note. European equites started weak.