The Sensex skidded 637 points while the Nifty plunged below the 18,050-level on Wednesday as investors took money off the table after a two-day rally ahead of the release of US Fed meeting minutes.

Unabated foreign fund outflows also weighed on sentiment, traders said.

The 30-share BSE Sensex slumped 636.75 points or 1.04 per cent to settle at 60,657.45. The broader NSE Nifty ended lower by 189.60 points or 1.04 per cent at 18,042.95.

Tata Steel was the biggest loser among Sensex components, slipping 2.32 per cent, followed by Power Grid, Tata Motors, Wipro, Infosys, HDFC Bank, HDFC and Reliance Industries.

Only two counters managed to end in the green -- Maruti Suzuki and TCS, rising up to 0.22 per cent.

"The domestic market affected by the worries in the global market, traded with deep cuts. Fears over aggressive rate hikes resurfaced ahead of the release of Fed meeting minutes, a meeting that left the door open for additional hikes.

"Apart from global cues, the domestic market will pay close attention to corporate earnings," said Vinod Nair, Head of Research at Geojit Financial Services.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said cautiousness ahead of the release of FOMC meeting minutes led to some profit booking in the index heavyweights.

"Some of the banks have announced strong pre-quarterly business updates indicating good results ahead, which could keep the sector in limelight. Other sectors like insurance, fertilizer, capital goods and agri related stocks can see some momentum in anticipation of development in upcoming Budget," he added.

In the broader market, the BSE midcap gauge declined 0.97 per cent and the smallcap index dipped 0.79 per cent.

Among sectoral indices, metal tanked 2.83 per cent, realty went lower by 1.99 per cent, utilities (1.74 per cent), energy (1.70 per cent), oil & gas (1.52 per cent) and power (1.51 per cent).

Elsewhere in Asia, equity markets in Seoul, Shanghai and Hong Kong ended in the green, while Tokyo settled lower.

Equity exchanges in Europe were trading in the positive zone in mid-session deals. Markets in the had US ended lower on Tuesday.

International oil benchmark Brent crude dipped 1.86 per cent to USD 80.57 per barrel.

The rupee recovered from its all-time low level and settled 18 paise higher at 82.82 (provisional) against the US dollar on Wednesday, supported by easing crude oil prices.

Foreign Institutional Investors (FIIs) offloaded shares worth a net Rs 628.07 crore on Tuesday, according to exchange data.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.