Indian equity benchmarks declined over 2 per cent on Thursday, led by slump in banking, financial and metal stocks.
Also, persistent high inflation in the US also weighed on the domestic indices, as they extended their fall for the fifth straight session.
Sensex closed at 52,930, down 1,158 points or 2.1 per cent, whereas Nifty was at 15,808 points, down 359 points or 2.2 per cent.
For fresh cues, investors await the April consumer price-based (CPI) inflation figure for India, which is scheduled to be released at 5.30 p.m. on Thursday.
It is widely expected that the inflation print would be above the RBI's 6 per cent upper band for the fourth straight month.
Adani Ports was the top loser as the stock slipped 5.8 per cent to Rs 715.
"The Indian rupee hit a fresh low of 77.63 against the US dollar today after the US inflation data sparked a fresh tumble in global equities," said Vinay Rajani, AVP, Retail Research, HDFC Securities.
Rajani sees India's April CPI inflation coming in at about 7.7 per cent.
"Expectations of high CPI for April coupled with margin pressures seen in fourth quarter earnings is further accentuating the selling pressure in equities which was evident in the number of stocks hitting yearly lows today as the Sensex broke 53K with all sectoral indices ending deeply in the red," said S. Ranganathan, Head of Research at LKP Securities.
"With safe-haven flows pushing the dollar index to twenty year highs, investors now seem to be pinning their hopes on a resolution to the conflict at the earliest."
Although expected global GDP growth rates for CY22 and CY23 are being lowered, India is perhaps the only major economy expected to grow at an average 7 per cent over the next two years, said Vineet Bagri, Managing Partner, TrustPlutus Wealth.
"Thus, we believe that once the selling pressure abates and commodity prices/inflation start cooling off, the Indian market should see a strong bounce back," Bagri added.