Benchmark Sensex declined by 361 points while the Nifty closed below the 17,000-level on Monday due to a sell-off in financials, IT and capital goods shares amid a global rout in equities on lingering worries over the banking crisis.
The 30-share BSE Sensex declined by 360.95 points or 0.62 per cent to close at 57,628.95 as 23 of its stocks ended in the red.
The index tanked more than 900 points to touch a low of 57,084.91 before recovering some losses at the fag end.
The broader Nifty of the NSE plunged by 111.65 points or 0.65 per cent to close below the 17,000-level at 16,988.40.
As many as 40 Nifty stocks declined while 10 advanced.
Analysts said investors fretted over the US banking crisis even as Federal Reserve and other central banks took efforts to ease a fast-growing banking crisis.
"The fear of contagion of the financial crisis has kept investors away from the equity markets as the global market faces numerous hurdles.
"Despite Swiss regulators' intervention to protect the global financial system, investor sentiment remained shaky," said Vinod Nair, head of research at Geojit Financial Services.
Among Sensex shares, Bajaj Finserv fell the most by 4.08 per cent. Bajaj Finance declined by 3.01 per cent, Tata Steel by 2.2 per cent, Wipro by 2.09 per cent, Tata Motors by 1.96 per cent, IndusInd Bank by 1.9 per cent, SBI by 1.75 per cent, Tech Mahindra by 1.66 per cent and HCL Tech by 1.2 per cent.
TCS, Infosys, Power Grid, Maruti, Reliance, HDFC twins, L&T, M&M, NTPC and Ultratech Cement were also among the losers.
Hindustan Unilever bucked the trend to emerge as the biggest Sensex gainer, rising by 2.45 per cent. ITC, Kotak Bank, Sun Pharma and Nestle also closed higher.
Global stock markets sank even as Swiss authorities arranged the takeover of Credit Suisse by UBS.
Investors were also concerned ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.
"The market is now awaiting the outcome of the Fed meeting to see how they will respond to the ongoing crisis, particularly in terms of rate hikes.
"Investors expect the central bank to raise interest rates by 0-25 basis points," Nair said.
In Asia, the Hang Seng in Hong Kong lost 2.7 per cent, The Nikkei 225 in Tokyo shed 1.4 per cent, the Shanghai Composite Index lost 0.5 per cent while the Kospi in Seoul retreated 0.7 per cent.
In early trading, the FTSE 100 in London lost 1.6 per cent, Frankfurt's DAX fell 1.4 per cent and the CAC 40 in Paris lost 1.2 per cent.
Switzerland's benchmark stock index dropped 1.8 per cent as Credit Suisse plunged 63 per cent and UBS sank 14 per cent.
On Friday, foreign institutional investors (FIIs) were the net sellers and sold Indian equities worth Rs 1,766.53 crore while domestic institutional investors (DIIs) were net buyers at Rs 1,817.14 crore.