Investors' wealth eroded by more than Rs 2.21 lakh crore in early trade on Wednesday, with the market witnessing a selling-off amid prospects of aggressive rate hikes by the US Federal Reserve to tackle high inflation, and sluggish global trends.

In less than hour of the start of trading on Wednesday, the key indices -- Sensex and Nifty -- were deep in the red and witnessed significant volatility, reflecting jittery investor sentiments.

The market capitalisation of BSE-listed companies, which is also an indicator of wealth of investors, tumbled more than Rs 2.21 lakh crore to Rs 2,84,49,727.56 crore amid the 30-share Sensex falling 564.76 points to 60,006.32 points.

On Tuesday, when the markets had gained for the fourth straight session, the market valuation stood at Rs 2,86,71,193.94 crore.

Global markets went into a tizzy on Tuesday soon after the US inflation data for the month of August triggered concerns over the possibility of further rate hikes by the US Federal Reserve.

Both the US and the European markets closed deep in the negative territory, with America's S&P 500 and Nasdaq Composite indices plummeting more 4.32 per cent and 5.16 per cent, respectively.

The Dow Jones Industrial Average shed 3.94 per cent.

Tracking the global trends, Asian markets, including Japan, China and Hong Kong, were also trading in the red.

Contrary to expectations, the US Consumer Price Index (CPI) rose 8.3 per cent in August. It was estimated to rise 8.1 per cent on an annual basis.

The inflation in the US rising despite cooling gas prices came as a surprise and spooked investor sentiments.

The current situation has triggered fears that the Federal Reserve is more likely to go for further aggressive rate hikes to curb rising inflation, which seems to be entrenched and could add to the global economic headwinds.