Indian equity benchmarks suffered sharp losses on Thursday as Dalal Street returned to trade after a day's holiday, dragged by losses in financial, IT, oil & gas and FMCG shares. An official reading of India's GDP released on Wednesday fell short of Street estimates.

Share Market Live

NSE

Both headline indices fell as much as 1.5 percent in the first few minutes of trade.

The Sensex dropped 898.6 points to 58,638.5 at the weakest level of the day so far and the Nifty50 slid to as low as 17,485.6, down 273.8 points from its previous close.

A total of 47 stocks in the Nifty50 basket began the day in the red. Eicher Motors, Hindalco, SBI Life, ICICI Bank and ONGC were the top laggards.

Axis Bank, HCL Tech, Asian Paints, Infosys and Mahindra & Mahindra — falling around 2-3 percent each — were also among the top blue-chip losers.

HDFC Life — up 0.3 percent — was the top gainer.

Infosys ICICI Bank, HDFC, Reliance and TCS were the biggest contributors to the fall in both Sensex and Nifty50.

Weakness across sectors weighed on both main indices.

Globally, investors remained on the back foot amid concerns about steep hikes in COVID-era interest rates and resilience of the world economy.

"The Indian market has shown surprising resilience while the US, Europe and most large emerging markets have turned weak... A major factor driving this outperformance is the return of FIIs into the Indian market," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Investors, however, have to exercise caution since Indian valuations are high and the global growth environment is not favourable for a sustained bull market, Vijayakumar added.

Biocon shares declined after the US Food and Drug Administration issued 11 observations for two of the company's sites in Bengaluru and six observations for its Malaysian site. The company said it will submit Corrective and Preventive Action Plans (CAPA) to the US drug regulator in the stipulated timeframe.

The company also said it does not expect the outcome of these inspections to impact its product supply.

Overall market breadth favoured the bulls, as 1,783 stocks rose and 982 fell on BSE.

Global markets

Equities in other Asian markets fell on Thursday following a weak session on Wall Street overnight, as worries about aggressive hikes in COVID-era interest rates kept investors on the back foot. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.9 percent and Japan's Nikkei 225 down 1.5 percent at the last count.

S&P 500 futures were down half a percent. On Wednesday, the three main US indices finished 0.5-1 percent lower.

Catch latest market updates with CNBCTV18.com's blog