Equity benchmark Sensex tanked over 400 points in early trade on Friday, tracking losses in index majors Reliance Industries, HDFC Bank and ICICI Bank amid a selloff in other Asian equities.

The 30-share index was trading 445.02 points or 0.80 per cent lower at 55,184.47, while the broader NSE Nifty slumped 147.10 points or 0.89 per cent to 16,421.75.

Tata Steel was the top loser in the Sensex pack, shedding over 3 per cent, followed by Kotak Bank, ICICI Bank, Dr Reddy’s, SBI, L&T, Axis Bank, HDFC Bank and Reliance Industries.

On the other hand, Bharti Airtel, Asian Paints, Infosys and Maruti were among the gainers.

"Taper rumours have again started impacting markets. Minutes of the latest US Fed meet indicate that tapering of bond purchases may start later this year. This triggered a risk-off in markets with the Dow and S&P 500 correcting by 1.1 per cent each on the 18th," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Tapering is negative news for markets since it will eventually reduce the liquidity available in the financial system, he noted.

"But the positive dimension is that the Fed is indicating tapering since economic growth revival is strong. If growth and earnings recovery is strong, markets are likely to stage a rebound after the initial jitters," he noted.

The stock market was closed on Thursday on account of Muharram.

Meanwhile, the Union Health Ministry has declared that the number of active Covid-19 cases in the country has declined to 3,63,605. A single- day rise of 36,571 new infections and 540 fatalities has pushed India's tally of cases to 3,23,58,829 and death toll to 4,33,589.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with heavy losses in mid-session deals amid mounting worries of the spread of delta variant of coronavirus in the region.

However, equities in the US largely ended on a positive note in overnight trade.