MUMBAI: Equity benchmark Sensex slumped over 500 points in early trade on Wednesday, tracking losses in index majors HDFC Bank, ICICI Bank and Infosys amid heavy selloff in global markets.
The 30-share Sensex was trading 501.74 points or 0.84 per cent lower at 59,165.86.
Similarly, the Nifty declined 135.05 points or 0.76 per cent to 17,613.55.
ICICI Bank was the top loser in the Sensex pack, shedding nearly 2 per cent, followed by HDFC Bank, Maruti, Bajaj Auto, Infosys and Bajaj Finserv.
On the other hand, Dr Reddy's, Tata Steel, Sun Pharma and Nestle India were among the gainers.
In the previous session, the 30-share index ended 410.28 points or 0.68 per cent lower at 59,667.60, and Nifty declined by 106.50 points or 0.60 per cent to close at 17,748.60.
Foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 1,957.70 crore on Tuesday, as per exchange data.
According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the surge in the benchmark US 10-year yield to 1.546 per cent spooked equity markets in the US with cuts of above 2 per cent in S&P 500 and Nasdaq.
"The rise in US bond yields triggering correction in equity markets has been a known threat for some time now. But what triggered this sudden spike in bond yield was the Fed chief Jerome Powell's statement that inflation may persist for a much longer time," he said.
Further, he noted that the rise in the dollar index to 93.7 levels indicate profit booking in stocks and safe-haven buying into the dollar.
"It is too early to conclude that this is a trend reversal for markets. But at the present elevated valuations, the risk is high. Investors may watch for consolidation in markets," he added.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with heavy losses in mid-session deals.
Meanwhile, international oil benchmark Brent crude fell 1.51 per cent to USD 77.17 per barrel.