Breaking its three-day rising streak, the BSE Sensex Tuesday fell over 300 points on heavy selling by market participants, in step with a global selloff despite strengthening rupee and easing crude prices.
Besides, profit-booking in recent gainers too fuelled the downward trend.
The 30-share Sensex, after starting off lower at 35,730.77, continued to slide as selling pressure picked up momentum and hit a low of 35,416.18, before settling 300.37 points, or 0.84 per cent, down at 35,474.51.
The index had risen 633 points in the last two sessions on the back of increased foreign fund inflows.
The 50-share NSE Nifty too dropped by 107.20 points, or 1 per cent, to 10,656.20. Intra-day, it traded between 10,640.85 and 10,740.85.
According to Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management, European indices opened lower as investors continued to monitor developments on Brexit.
"Technology companies had been leading the charge in the US and concerns about slowing growth and regulatory overhang, along with concerns around energy sector profitability, alongside rising interest rates led to the sell off in the US," he said.
Markets are reacting to slowing US economic growth and all eyes remain focused on commentary out of the Fed, he added.
Reflecting the bearish mood, all the sectoral indices, led by metal, teck and healthcare, ended in the negative zone.
Yes Bank hares saw the sharpest fall among Sensex components, tumbling 6.10 per cent after independent director Rentala Chandrashekhar resigned from the board Monday.
Other big losers were Tata Steel falling 3.21 per cent, Vedanta 2.89 per cent, NTPC 2.42 per cent, Bharti Airtel 2.09 per cent, SBI 1.79 per cent, HDFC 1.31 per cent, ICICI Bank 1.24 per cent and Maruti Suzuki 1.18 per cent
Also, ONGC fell 1.17 per cent, RIL 0.95 per cent, Sun Pharma 0.95 per cent, PowerGrid 0.90 per cent, Coal India 0.83 per cent, Bajaj Auto 0.71 per cent, Tata Motors 0.54 per cent, Hero MotoCorp 0.50 per cent, HUL 0.43 per cent, Asian Paint 0.40 per cent, Axis Bank 0.37 per cent, L&T 0.24 per cent and ITC 0.11 per cent.
Stocks of software services exporters also bore the brunt on stronger rupee, with TCS, Infosys and Wipro falling up to 2.59 per cent.
Sectorwise, the BSE metal index dropped 2.82 per cent, followed by IT 1.74 per cent, teck 1.58 per cent, healthcare 1.57 per cent, PSU 1.15 per cent, consumer durables 1.08 per cent, power 1 per cent, auto 0.83 per cent, bankex 0.78 per cent, FMCG 0.71 per cent, infrastructure 0.62 per cent, capital goods 0.37 per cent and oil & gas 0.35 per cent.
Broader markets, too, reflected a similar trend. The BSE mid-cap index fell 0.92 per cent while the small-cap shed 0.86 per cent.
Meanwhile, the rupee continued its rising spree for the sixth straight day, and strengthened by another 20 paise to trade at nearly three-month high of 71.47 against the dollar in late afternoon trade after the outcome from Monday's RBI board's meet removed uncertainty over a growing rift over policy decisions between the government and the central bank.
Elsewhere in Asia, Shanghai Composite Index plunged 2.13 per cent, Hong Kong's Hang Seng fell 2.01 per cent, Japan's Nikkei down 1.09 per cent and Singapore index down 1.24 per cent. Korea's KOSPI and Taiwan index fell 0.86 per cent each.
In the Eurozone, Frankfurt's DAX lost 0.61 per cent, Paris CAC 40 shed 0.70 per cent, while London's FTSE shed 0.39 per cent in their morning session.