Sensex crashed below the 29,000-level while the Nifty dived almost 500 points on Wednesday as the coronavirus pandemic maintained its death grip on markets across the globe.

S&P lowering India's growth forecast and the Supreme Court's refusal to provide relief to telecom firms on the AGR issue further sapped risk appetite, traders said.

After swinging over 2,488.72 points in a highly volatile session, the 30-share BSE Sensex closed 1,709.58 points or 5.59 per cent lower at 28,869.51.

The Sensex has closed below the 29,000-mark for the first time since January 2017.

On similar lines, the broader NSE Nifty plummeted 498.25 points, or 5.56 per cent, to end at 8,468.80.

Barring ONGC and ITC, all Sensex constituents finished in the red.

IndusInd Bank was the top loser, diving 23.90 per cent, followed by PowerGrid (11.29 per cent), Kotak Bank (11.23 per cent), Bajaj Finance (11.11 per cent), HDFC Bank (9.92 per cent) and NTPC (8.08 per cent).

Earlier in the day, S&P Global Ratings lowered India's economic growth forecast to 5.2 per cent for 2020, saying the global economy is entering a recession amid the coronavirus pandemic.

The agency had earlier projected a growth rate of 5.7 per cent during the 2020 calendar year.

Asia-Pacific economic growth in 2020 will more than halve to less than 3 per cent as the 'global economy enters a recession', S&P said in a statement.

Banking and telecom stocks came under heavy selling pressure after the Supreme Court pulled up the telecom companies for doing self-assessment of the Adjusted Gross Revenue (AGR) dues fixed by the apex court in its verdict on October 24 last year.

The telecom companies have to clear all dues mentioned in the judgement, the court said.

'Indian markets ended at three year lows, with Nifty below the 8,500 mark, in tandem with Asian and European markets after global agencies warned of a global recession following the impact of Covid-19. At the same time, rising infections in India and associated disruption in businesses led to India's GDP growth forecasts also being downgraded. This will also affect the government's fiscal maths, which was already tight.

'Additionally, with the supreme court not providing any respite to telecom players, the banking stocks which have exposure to the telecom sector were most impacted today. Nifty Bank index fell by around 7 per cent,' said Vinod Nair, Head of Research at Geojit Financial Services.

All sectoral indices closed with losses, with BSE telecom, finance, utilities, bankex, power, realty and auto tanking up to 9.48 per cent.

The BSE midcap index fell 0.73 per cent, while the smallcap gauge crashed 6.09 per cent.

On the global front, the stimulus measures announced by various countries failed to dispel investor gloom over the economic impact of the Covid-19 pandemic.

Bourses in Shanghai, Hong Kong, Seoul and Japan plunged up to 4.86 per cent.

Equity benchmarks in Europe tumbled up to 4 per cent in early trade.

US President Donald Trump has proposed an economic package which could approach USD 1 trillion, a rescue initiative not seen since the great recession of 2008.

Further, the Asian Development Bank (ADB) has announced a USD 6.5 billion package for its developing member countries to fight the pandemic.

The number of deaths around the world linked to Covid-19 has topped 7,400, with over 1,80,000 infections recorded globally so far.

In India, the number of infected cases stood at 130, as per the union health ministry.

The rupee depreciated 12 paise to 74.36 against the US dollar (intra-day).

Meanwhile, global oil benchmark Brent crude futures slipped over 3.48 per cent to USD 27.73 per barrel.