The benchmark BSE Sensex closed up 1.35 per cent at 34,760.89 on Wednesday.
Indian markets on Thursday opened in red with BSE Sensex tumbling over 900 in morning trade. Shortly after opening, Sensex tumbled around 1000 points, trading at 33,918.29 at 9.30am.
Nifty, on the other hand, dipped by 290.3 points at 10,169.80 in opening trade today.
Indian rupee hit a new low of 74.47 versus the US dollar.
Indian equities ended more than 1 per cent higher on Wednesday with shares of non-banking financial companies staging a recovery, while IT stocks closed lower as the rupee strengthened against the US dollar.
Meanwhile, Asian share markets sank in a sea of red on Thursday after Wall Street suffered its worst drubbing in eight months, a conflagration of wealth that could threaten business confidence and investment across the globe, news agency Reuters reported.
Japan's Nikkei fell 3.4 per cent, the steepest daily drop since March, while the broader TOPIX lost around $195 billion in market value.
Shanghai shares touched their lowest since late 2014, while China blue chips slid 3 per cent.
On Wall Street, the S&P500's sharpest one-day fall since February wiped out around $850 billion of wealth as technology shares tumbled on fears of slowing demand.
Oil prices skidded in line with US equity markets, even though energy traders worried about shrinking Iranian supply from US sanctions and kept an eye on Hurricane Michael, which closed some US Gulf of Mexico oil output.
Brent crude fell 76 cents to $82.33 a barrel, while US crude dropped 68 cents to $72.49.