The 30-stock benchmark index Sensex dipped 563.85 points, or 1.8 per cent, to 31,299.23, while the Nifty 50 index plunged 164.15 points, or 1.8 per cent, to 9,149.75 in the opening trade.
ICICI Bank and Bajaj Finance (both down 4 per cent) remain the worst performers while HDFC twins were also down 2 per cent each.
Meanwhile, US equities indices showed mixed reactions, shedding its gains during the day, after the Covid-19 pandemic continues to disrupt the world’s largest economy.
On Thursday, the Dow Jones Industrial Average moved 39.44 points, or 0.17 per cent, to 23,515.26. The S&P 500 fell 1.51 points, or 0.05 per cent, to 2,797.80. The Nasdaq Composite Index was down 0.63 points, or 0.01 per cent, to 8,494.75, Xinhua news agency reported.
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The 30-stock index rallied more than 400 points earlier in the session, while both the S&P 500 and the Nasdaq were up more than 1 per cent.
On the data front, US initial jobless claims, a rough way to measure layoffs, registered 4.427 million in the week ending April 18, the Department of Labor reported on Thursday. That brought the total number of claimants in the past five weeks to more than 26 million amid the Covid-19-19 fallout.
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Even most Asian stocks plunged into red tracking global peers with Japan's Nikkei 225 falling 0.8 per cent, while Hong Kong Hang Seng index down 0.2 per cent. Kospi index in Korea and China's Shanghai Composite tumbled 0.5 per cent each. SGX Nifty indicates a negative opening for Indian shares.
Meanwhile, oil prices jumped on Thursday as the escalating tensions between US-Iran, provided support to equity markets. After the US President Donald Trump ordered the US Navy to destroy Iranian boats that harass American ships in the Gulf, Iran's Revolutionary Guards warned the US with a "decisive response". The US West Texas Intermediate (WTI) moved 20 per cent higher to $16.50 per barrel, while Brent crude gained 4.7 per cent to $21.33 per barrel.
(With inputs from agency)