Equity benchmark Sensex dropped over 400 points in early trade on Thursday, dragged by losses in index majors Reliance Industries, Infosys and HDFC Bank amid foreign fund outflow and a weak trend in global markets.

The 30-share BSE index was trading 404.94 points or 0.82 per cent lower at 48,775.37, and the broader NSE Nifty declined 113.50 points or 0.78 per cent to 14,435.90.

IndusInd Bank was the top loser in the Sensex pack, shedding around 2 per cent, followed by Maruti, SBI, Axis Bank, Bajaj Finance, Reliance Industries, Infosys and HDFC Bank.

On the other hand, ONGC, Titan, L&T and Dr Reddy's were among the gainers.

In the previous session, the Sensex ended 871.13 points or 1.74 per cent lower at 49,180.31, and the Nifty declined 265.35 points or 1.79 per cent to 14,549.40.

Foreign institutional investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 1,951.90 crore, as per exchange data.

"The uncertainty in the market continues with increasing risk arising from the second wave of Covid-19 attack in India in the context of a third wave in parts of Europe," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Volatility is here to stay for some time before stability emerges, he said, adding that a major trend in the market now is the comeback of pharma stocks in recent days and the weakness in banking stocks.

Elsewhere in Asia, bourses in Shanghai and Hong Kong were in the red in mid-session deals, while Tokyo and Seoul were trading on a positive note.

Top bourses on Wall Street ended with significant losses in overnight trade.

Meanwhile, the global oil benchmark Brent crude was trading 1.41 per cent lower at USD 63.50 per barrel.