Indian shares recouped most losses after key indexes plunged over 3 percent in afternoon trade on panic-selling in housing finance and property stocks.
The broader Nifty fell as much as 3.3 percent to 10,866.45, its first time below 11,000 since late July. The benchmark Sensex dropped as much as 3.04 percent, shedding nearly 1,500 points from the day's high, to 35,993.64. Both the indexes posted their biggest intraday fall since Feb. 6.
As of 0923 GMT, the Nifty was down 1.2 percent while the Sensex was 1.1 percent lower.
Graphic: NSE index chart https://reut.rs/2pqF3kU
Both the indexes were on track to end the week over 4 percent lower.
India's fear gauge, the Nifty volatility index surged to 20.8 percent during the sell-off.
It was not clear what sparked the tumble.
Krish Subramanyam, co-head equity advisor at Altamount Capital, said rumours about one group "spilled over to other NBFCs (non-banking finance companies)".
Dewan Housing Finance Corp Ltd (DHFL) was the worst hit among the pack, wiping off as much as $1.45 billion from its market value. The stock fell as much as 55 percent to 274.75 rupees to its lowest since Jan. 23, 2017.
Indiabulls Housing Finance Ltd fell up to 34 percent to hit its lowest since Feb. 1, 2017, in its worst intraday fall since its listing in 2013.
The Nifty realty index dropped as much as 7.4 percent to its lowest since April 19, 2017 - its worst intraday performance since Feb. 2.
Indiabulls Real Estate Ltd plunged as much as 20 percent to its lowest since April 17, 2017.
Earlier in the session, the NSE index had risen 1 percent to 11,346.80, while the BSE index had gained nearly 1 percent to 37,489.24.
Shares in Yes Bank Ltd remained under pressure, falling 26.5 percent, after the central bank reduced CEO Rana Kapoor's term, creating uncertainty about its outlook.