Equity benchmarks buckled under selling pressure for the second straight session on Thursday as traders reduced their exposure to riskier assets after minutes from the US Federal Reserve's latest meeting indicated more rate hikes this year.

Continuous foreign fund outflows added to the selling pressure, market participants said.

Paring initial gains, the 30-share BSE Sensex tumbled 304.18 points or 0.50 per cent to close at 60,353.27.

Similarly, the broader NSE Nifty dipped 50.80 points or 0.28 per cent to end at 17,992.15.

Bajaj Finance was the top loser among Sensex constituents, plunging 7.21 per cent, followed by Bajaj Finserv, ICICI Bank, Infosys, Power Grid, Titan, Axis Bank, and Tech Mahindra.

In contrast, ITC, NTPC, Hindustan Unilever, Mahindra & Mahindra, Nestle India, Sun Pharma and Tata Steel were among the gainers, climbing as much as 1.91 per cent.

The market breadth was negative, with 18 declines compared to 12 advances.

"Globally, investors are digesting the Federal Open Market Committee (FOMC) minutes with stock markets trading lower revealing that the Fed officials are determined to tame inflation by maintaining its aggressive stance. Financials led the losses in the domestic market, following dismal business numbers from NBFC leader.

"Oil prices recovered after falling sharply on fears of a worldwide recession, as investors remain optimistic about long-term demand," said Vinod Nair, Head of Research at Geojit Financial Services.

In the broader market, the BSE midcap gauge climbed 0.33 per cent and smallcap index inched up 0.01 per cent.

Among sectoral indices, financial services declined 1 per cent, bankex dipped 0.78 per cent, teck (0.61 per cent), IT (0.61 per cent) and telecommunication (0.20 per cent).

Oil & Gas rallied 1.60 per cent, FMCG climbed 1.36 per cent, energy jumped 1.28 per cent, auto 1.12 per cent and metal 1.03 per cent.

"Markets have been drifting lower amid mixed signals from the global front however the pace of decline is gradual, thanks to rotational buying in select index majors from across sectors... Amid all, we recommend continuing with stock-specific approach while keeping a check on the position size," said Ajit Mishra, VP - Technical Research, Religare Broking Ltd.

Minutes from the US Federal Reserve's December meeting showed that officials remained determined to keep rates high in 2023 and wanted more evidence of cooling inflation before easing its tight monetary policy.

Elsewhere in Asia, equity markets in Seoul, Tokyo, Shanghai and Hong Kong ended in the green on optimism over China restricting its anti-COVID measures.

Equity exchanges in Europe were trading on a mixed note in mid-session deals. Markets in the US had ended in the positive territory on Wednesday.

International oil benchmark Brent crude jumped 2.04 per cent to USD 79.43 per barrel.

The rupee gained 32 paise to close at 82.50 (provisional) against the US dollar on Thursday, supported by a weaker greenback overseas.

Foreign Institutional Investors (FIIs) offloaded shares worth a net Rs 2,620.89 crore on Wednesday, 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.