Indian shares fell for a second straight session on Friday, with weak global cues and a move by the government to tax gains from debt mutual funds via an amendment to the Finance Bill weighing on sentiment.
Global cues were weak, with European markets opening sharply lower after Deutsche Bank saw a spike in credit default swaps on Thursday night.
Separately, the Bloomberg reported that Credit Suisse Group and UBS Group AG are among the banks under scrutiny in a U.S. Justice Department probe for potentially helping Russian oligarchs evade sanctions.
The dollar benefited from increased risk aversion, offsetting investor optimism over falling oil prices.
Oil prices were down more than 2 percent in European trade on concerns about the impact on demand from a possible recession or further banking upheaval.
The benchmark S&P BSE Sensex fell 398.18 points, or 0.69 percent, to 57,527.10 while the broader NSE Nifty index settled 131.85 points, or 0.77 percent, lower at 16,945.05.
Among the prominent decliners, Adani Ports, Hindalco, Tata Steel, Bajaj Finance and Bajaj FinServ fell 3-4 percent.
Drug maker Cipla topped the gainers list to close up more than 1 percent.
Market Analysis