During the day, it tanked more than 900 points to 53,918.02. The Sensex dived 866.65 points or 1.56% to finish at 54,835.58 on Friday.
Investors' wealth worth ₹7.73 lakh crore was wiped off as the domestic equity markets tumbled along with global risk assets.
The two-day slump in equities eroded ₹7,73,582.29 crore from the market capitalisation of BSE-listed companies, which now stands at ₹2,51,91,307.08 crore.
Weakness in global markets, unabated foreign fund outflows and the rupee plunging to its life-time low against the US dollar have weighed on sentiment.
Rupee tumbled to a record low of 77.52 against the US dollar earlier in the session. It settled at 77.465.
"There seems to be no respite for the markets from the bear hug as the weak Asian gauges and fall in European indices dampened the investors' sentiment. Post the results, Reliance Industries came under severe hammering, which dragged the overall markets," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.
Reliance Industries was the top drag on the Sensex pack today, dropping 3.97%, after the company's March quarter earnings failed to cheer investors.
IndusInd Bank, Nestle India, Tata Steel, Tech Mahindra, SBI, HUL and ITC were among the other major laggards, losing as much as 2.97%.
In contrast, PowerGrid, HCL Technologies, Infosys, Maruti, Bajaj Finserv and HDFC featured among the gainers, climbing up to 2.83%.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said, "Indian equity market continued with its sell-off in line with global peers on the back of slowing economic growth and rising inflationary concerns. Global cues were weak amidst concerns over aggressive monetary tightening by central banks to overcome soaring inflation which could slow down the economic growth. Further Covid induced lockdown in Shanghai further dampened the sentiments."
World stocks remained under pressure on growing concerns about interest rate hikes by central banks amid stubborn inflation.
Foreign institutional investors continued their selling spree, offloading shares worth a net ₹5,517.08 crore on Friday, as per the stock exchange data.
In the broader market, the BSE smallcap gauge declined 1.67% and the midcap index dipped 1.89%.
Meanwhile, state-owned insurer Life Insurance Corporation's initial public offering, the country's biggest, was subscribed 2.85 times on the last day of bidding as of 1003 GMT.