At close, the Sensex was down 1,062 points, or 1.33 per cent, at 72,404, while the Nifty fell 345 points, or 1.55 per cent, to 21,957.

Investors' wealth eroded by around Rs 7 lakh crore after the mayhem in the stock market on Thursday.

Sectoralwise, Nifty PSE was the top loser, falling by 3.41 per cent, while Nifty Oil and Gas and Nifty Energy indices dropped by 3.15 per cent and 2.97 percent, respectively.

Nifty Infra, Nifty FMCG, and Nifty Metal fell by more than 2.5 per cent, while Nifty Auto was the only index that closed in green, up by 0.78 per cent.

More pressure was seen on midcap and smallcap stocks than on largecap markets. The Nifty Midcap 100 index fell 927 points, or 1.85 per cent, to 49,109, while the Nifty Smallcap 100 index fell 465 points, or 2.83 per cent, to 15,995.

The India Vix recorded a jump of 6.56 per cent on Thursday to close at 18.20, reflecting the market volatility.

Santosh Meena, Head of Research at Swastika Investmart Ltd, said, "The market is continuously witnessing pressure ahead of the election outcomes. We don't have any global reason for this correction, while some uncertainty ahead of the big event is causing profit booking in the market.

"Our market has been largely driven by domestic investors, including HNIs and institutional investors, for the last few months. They are sitting on the sidelines for the last couple of days and taking some profit off the table ahead of the big event, while FIIs are continuously selling, which is pushing the market lower."