Benchmark Sensex tumbled 530 points and the broader Nifty shed 172 points in early trade on Wednesday as concerns over further rate hikes by the US Federal Reserve to tame inflation and weak global cues spooked investor sentiments.

After four continuous sessions of gains, the 30-share Sensex plunged 530.36 points or 0.88 per cent to 60,040.72 points while the Nifty declined 150.75 points or 0.83 per cent to 17,919.30 points.

As many as 21 stocks, including Reliance Industries, from the Sensex pack fell in early trade amid significant volatility.

Asian markets were in the negative territory amid expectations of aggressive rate hikes by the Federal Reserve to tackle inflation which was higher than expected in August. On Tuesday, the US and European markets too closed in the red.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the 4.32 per cent and 5.12 per cent cut in S&P 500 and Nasdaq on Tuesday again reminds that there is more uncertainty about inflation and growth and more volatility ahead for markets.

"The worse-than-expected CPI inflation data in the US, despite cooling gas prices, was a surprise. Now the market fears that inflation is getting entrenched and an ultra-hawkish Fed might trigger a hard landing for the US economy," he said.

On Tuesday, the 30-share Sensex surged 455.95 points or 0.76 per cent to close at a five-month high of 60,571.08 while the broader Nifty climbed 133.70 points or 0.75 per cent to settle at 18,070.05. Previously, the Nifty had closed above the 18,000-mark on April 4 this year.

In the last four sessions, Sensex had gained over 1,540 points or 2.59 per cent while Nifty had risen by 445 points or 2.9 per cent.

The US inflation in August rose higher at 8.3 per cent year-on-year against expectation of 8.1 per cent. It increased 0.1 per cent month-on-month whereas economists were expecting it to decline by 0.1 per cent, Ritika Chhabra - Economist and Quant Analyst at Prabhudas Lilladher, said.

"With inflation being stickier than expected, it is highly likely that the Fed will go for another jumbo rate hike of 75 basis points in its next FOMC (Federal Open Market Committee) meeting," Chhabra said.

Foreign institutional investors pumped Rs 1,956.98 crore into domestic equities on Tuesday, as per data available with BSE.

Brent crude futures were marginally higher at USD 93.32 per barrel.