The broader NSE Nifty fell 78.75 points, or 0.70 per cent, to close at 11,234.55.
Equity benchmark BSE Sensex plunged 298 points on Thursday, dragged by heavy losses in banking, auto and metal stocks amid muted earnings outlook.
After sinking 375 points during the day, the 30-share Sensex ended 297.55 points, or 0.78 per cent, lower at 37,880.40.
It hit an intra-day low of 37,802.93 and a high of 38,130.23.
Similarly, the broader NSE Nifty fell 78.75 points, or 0.70 per cent, to close at 11,234.55.
Top laggards in the Sensex pack included IndusInd Bank, Yes Bank, Tata Motors, Vedanta, ICICI Bank, SBI, HDFC Bank and Tata Steel, falling up to 6.15 per cent.
On the other hand, Bharti Airtel, RIL, HUL, HCL Tech, PowerGrid, Sun Pharma, Asian Paints and Bajaj Auto rose up to 5.05 per cent.
Weak earnings outlook weighed on domestic investor sentiment, traders said.
Kicking off the earnings season, IndusInd Bank's Q2 consolidated net profit jumped 52.2 per cent, but gross non-performing assets rose to 2.19 per cent of gross advances as on September 30, 2019, from 1.09 per cent in the same period a year ago.
Meanwhile, Moody's Investors Service on Thursday slashed its 2019-20 GDP growth forecast for India to 5.8 per cent from 6.2 per cent earlier, saying the economy was experiencing a pronounced slowdown which is partly related to long-lasting factors.
According to a Motilal Oswal report, the second quarter earnings season will be tepid and uneventful.
Underlying demand slowdown in the domestic economy and weak global commodities prices are expected to take a toll on earnings.
Echoing the outlook, Sunil Tirumalai, Head of Research and Strategist, Emkay Global Financial Services, expects growth trends to weaken further from Q1 levels, with the decline led by auto, telecom, power, IT services and pharma sectors.