Despite the rate cuts by the RBI, a slew of negative factors weighed on the local bourses as the benchmark Sensex tumbled by nearly 248 points to close at a more than three-year low of 8,197.92.
One negative factor was that the country's export dipped by 13 per cent in February - the fifth decline in a row - while imports also fell for the second consecutive month by about 18 per cent during the period.
Although domestic funds tried to salvage the situation to some extent, sustained heavy selling by foreign institutional investors (FIIs) put pressure on the market, a broker said.
Weakness in European markets at opening also aggravated the situation, brokers added. CAC was down by 1.35 per cent, DAX by 1.92 per cent and FTSE by 1.52 per cent in morning trade.
Asian indices exhibited mixed trends at the close on . Singapore, Hong Kong and South Korea ended in the red while Taiwan, Japan and China closed in the green.
The Bombay Stock Exchange 30-share barometer opened firm at 8,535.03, partly on the back of recovery on Wall Street on Wednesday. But it settled the day with a fall of 2.94 per cent from its previous close.
Similarly, the 50-share Nifty of the National Stock Exchange also plunged to 2,576.70, a fall of 68.50 points or 2.59 per cent, from its last close.