Sensex fell 1.4 percent on Wednesday, marking a seventh straight session of losses, as firefighting between the Indian army and insurgents across the India-Myanmar border further dented already weak sentiment.
The fall marked the longest losing streak since the seven-day losing streak in mid-December, while the rupee sank to a more than six-month low on foreign fund outflows.
The BSE index ended 1.39 percent lower at 31,159.81, while the broader NSE index fell 1.38 percent to 9,735.75. The indexes earlier hit their lowest levels in over six weeks.
NSE's volatility index, the domestic equivalent of the VIX fear gauge, rose as much as 9.6 percent.