The benchmark Sensex of the Bombay Stock Exchange witnessed its biggest decline in seven months by falling 317 points, or 1.6%, to 19,325 on Thursday, amid weak global cues triggered by concerns that the US Federal Reserve's policy-tightening moves may hit liquidity. "We believe this was largely due to the weakness in global markets," said Dipen Shah, head of private client group research, Kotak Securities. "The minutes of the last Fed meeting said that it may withdraw the monetary stimulus if there is some improvement in the economic data. This has raised concerns about fund flows across asset classes, including emerging markets."

"Indian markets have received substantial FIIs (foreign institutional investor) money over the past few months and any reversal of the same may make markets vulnerable, if matching flows do not come from the domestic participants," he added.

The Nifty of the National Stock Exchange also plunged 91 points, or 1.5%, to 5,852.

Banking shares were among the major losers. While ICICI Bank fell 4%, SBI declined 2%. Major losers also included Jindal Steel (down 4.2 %), Tata Steel (4%) and Sterlite Industries (4%).