The 30-share Sensex provisionally ended lower by 146 points at 26,572 and the 50-share Nifty was down 50 points at 8,047.

Benchmark indices have slipped further on persistent selling by foreign institutional investors as concerns regarding MAT continue to float around.

Weakening of rupee along with rebound in crude oil prices has dampened the sentiments.

At 2.45 PM, the Sensex is down 265 points at 26,432 while the Nifty has shed 91 points to quote at 8,006 mark.

Top losers on the BSE include Tata Power, Axis Bank, ONGC , Maruti Suzuki, ICICI Bank down between 3-4%.

Benchmark indices continue to trade lower amid choppy trades weighed down by financial and oil shares. However, the downslide is capped on account of buying demand among IT shares after the rupee weakened further by 63 paise to 64.17 against dollar.

According to analysts, high-speed trading that takes place through dynamic software programs has worsened the fall for the markets that were already on an edge following the emergence of a broad selling pressure as FIIs unwound positions on MAT worries and domestic traders remained hesitant to step in due to weak corporate earnings in Q4.

At 13:50PM, the 30-share Sensex was down 113 points at 26,604 and the 50-share Nifty was down 40 points at 8,057. The benchmark indices have hit their lowest level in more than 20 weeks amid initial volatility.

The broader markets are underperforming the benchmark indices- BSE Midcap and Smallcap indices are down 1-2%.

Market breadth in BSE is negative with 1,673 declines against 770 advances.

Further, overseas funds sold around a net $630 million in Indian shares and bonds on Wednesday, marking their biggest single-day sales since January 2014, reinforcing fears that an emerging market darling is losing its allure.

Traders will keenly watch the proceedings of Rajya Sabha which will consider the Goods and Services Tax (GST) Bill that was passed by Lok Sabha yesterday. The bill may be referred to a select committee if the government fails to muster enough support from the parliamentarians to get the bill passed in the Upper House and in that case India will not be able to keep to its deadline of April 2016 to roll out GST.

Yesterday, the Union Cabinet eased norms for investing in real estate investment trusts (REITs), a decision that is likely to provide fresh impetus for expansion to the real estate sector.

The rupee fell to its lowest in 20 months on Thursday, weighed down by concerns over the government's taxation policies that threaten to reduce the allure of local assets for foreign institutions, while a global debt sell-off also hurt. The partially convertible rupee was trading at 64.14 per dollar by 13:33 PM.

BSE Bankex and BSE Capital Goods index have slumped by almost 2% followed by counters like Healthcare, Auto, Consumer Durables, Realty and Power, all dipping by 1% each. However, BSE IT index has surged by over 1%.

From the financial space, ICICI Bank, HDFC Bank, Axis Bank, SBI and HDFC have slipped between 1-2.4%.

According to the latest data released by the Reserve Bank of India (RBI), the banking sector's asset quality woes further worsened in the last one year, with gross non-performing asset (GNPA) ratio inching to 4.45 per cent as on March 15 this year, as compared to 4.1% in March 2014,

Other notable losers are ONGC, Tata Power, Hindalco, Dr Reddy’s Labs, Maruti Suzuki and RIL.

Shares of information technology (IT) companies are trading higher in otherwise subdued market after the rupee weakened. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

Tata Consultancy Services (TCS), Infosys, HCL Technologies, CMC, MindTree and Polaris Consulting & Services are up 1%-3% on the National Stock Exchange (NSE).

Among other shares, MEP Infrastructure Developers has dipped 12% to Rs 53.75 on the BSE, extending its previous day’s fall, after Credit Suisse (Singapore) sold more than half of its holding in the company through the open market.

World financial markets were unsettled again on Thursday as a week-long sell-off in benchmark government bonds, stocks and the dollar, and a race up in oil prices, was compounded by UK election uncertainty.

Nerves were still jangling in Europe and shares and bonds got off to another poor start on fears the recent surge in yields, the euro and energy costs could snuff out the only recently-formed hopes of a solid euro zone recovery.