Indian shares followed global peers lower on Wednesday as weak manufacturing data added to concerns that the U.S. economy could be headed to a recession.
Investors also looked ahead to the release of all-important U.S. jobs data on Friday for potential clues to Federal Reserve rate cuts.
The benchmark S&P/BSE Sensex fell 490 points, or 0.6 percent, to 82,065 in early trade while the broader NSE Nifty index was down 150 points, or 0.6 percent, at 25,129.
Infosys, ONGC, Wipro, LTIMindtree and Coal India tumbled 2-3 percent in the Nifty pack while Asian Paints and BPCL were up around 2 percent each on expectations that they will benefit from falling oil prices.
Crude prices extended losses in Asian trading after having slumped about 5 percent in the U.S. trading session overnight on growth worries.
The rupee edged up by 2 paise to 83.96 against the dollar in early trade.