After touching a low of 31,362.87, the 30-share index settled 242.37 points or 0.76 per cent lower at 31,443.38.
Similarly, the broader NSE Nifty slipped 71.85 points, or 0.78 per cent, to end at 9,199.05.
ONGC was the top loser in the Sensex pack, slumping over 4 per cent, followed by NTPC, Kotak Bank, Titan, Bharti Airtel and PowerGrid.
On the other hand, IndusInd Bank rallied over 6 per cent. M&M, Reliance Industries, Axis Bank and Tech Mahindra were the other gainers.
Market tried to cut losses in the morning session but failed as selling resumed in consumer durables and banking sectors, keeping benchmarks below Wednesday's levels, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.
In the afternoon session, volatility intensified amid fears that the peak of fresh COVID-19 cases was nowhere near after the case count surged past 50,000, he added.
The number of coronavirus cases in India climbed to 52,952, while the death toll rose to 1,783, according to the health ministry.
Globally, the number of cases linked to the disease has crossed 37.55 lakh and the death toll has topped 2.63 lakh.
Meanwhile, bourses in Shanghai, Hong Kong and Seoul ended in the red, while Seoul closed with gains.
Stock exchanges in Europe were trading higher in early deals.
International oil benchmark Brent crude futures rallied 4.98 per cent to USD 31.20 per barrel. ANS ABMABM