Taking a sharp U-turn by giving up all the early gains, the benchmark BSE Sensex slipped into the negative terrain in the closing hour of trade by tumbling over 500 points, tracking weak European markets amid lingering global growth worries.
The NSE Nifty too came under pressure, which cracked below the 7,900-mark at the far end of the session.
In addition, offloading of bets by participants ahead of September expiry in the derivatives segment on Thursday queered the pitch.
The 30-share index, which rose over 146 points in early trade, slumped below the crucial 26,000-mark to quote at 25,701.16, down by 491.82 points, or 1.87 per cent.
The index had shed 25.93 points in choppy trade.
All sectoral indices led by power, metal and capital goods tumbled up to 3.15 per cent, dragging down the markets from their key levels.
The NSE Nifty dropped 156.20 points, or 1.95 per cent, to 7,820.90.
Furthermore, fresh weakness in the rupee, which depreciated 7 paise to Rs. 65.80 (intra-session) against the dollar, dampened mood.
Sentiment turned off-colour after European markets declined in early trade as investors weighed Federal Reserve pointers that global growth concerns that delayed a rate hike last week could be temporary.
Major losers that pulled down the key indices were Vedanta, Hindalco, NTPC and Tata Motors.
Globally, FTSE fell 2.11 per cent while France’s CAC and the pan-European Euro Stoxx were down up to 2.76 per cent.