Equity benchmark Sensex on Monday crashed about 1,546 points to sink below the 58,000-level due to across-the-board selloff tracking sluggish global markets.
Besides, persistent foreign capital outflows continued to affect the market sentiment, traders said.
Benchmark indices started the session on a weaker note and the selling intensified during afternoon trade, with almost all sectoral indices ending in the red.
The 30-share BSE Sensex ended 1,545.67 points or 2.62 per cent lower at 57,491.51. Similarly, the NSE Nifty slumped 468.05 points or 2.66 per cent to 17,149.10.
All Sensex components ended in the red.
Bajaj Finance was the top loser, shedding around 6 per cent, followed by Tata Steel, Bajaj Finance, Wipro, Tech Mahindra, Titan, Reliance Industries and HCL Tech.
"Indian markets opened negative following mixed Asian market peers as investors look ahead to US Fed meeting and rising geopolitical uncertainty. During the afternoon session, they further sold off as indices fell well below psychologically crucial levels.
"The broader indices too capitulated to selling pressure and were trading with heavy losses of around 3 per cent each. Sentiments were so fragile that traders paid no heed toward RBI's data showing that the country's foreign exchange reserves grew by USD 2.229 billion to USD 634.965 billion in the week ended January 14, Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers, said.
Elsewhere in Asia, bourses in Hong Kong and Seoul ended with losses, while Tokyo and Shanghai were positive.
Equities in Europe were witnessing intense selling pressure in mid-session deals.
Meanwhile, international oil benchmark Brent crude rose 0.32 per cent to USD 88.17 per barrel.
Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 3,148.58 crore on Friday, according to stock exchange data.
Rupee Falls By 19 Paise To 74.62 Against US Dollar
The rupee on Monday slumped by 19 paise to 74.62 (provisional) against the US dollar at close due to high crude oil prices, forex outflows and heavy losses in domestic equities amid growing geo-political worries.
Forex traders said the strength of the American currency in the overseas market and weak appetite for riskier assets also dragged down the local unit.
Moreover, market participants are now eyeing the US Fed's January 25-26 meeting for further cues.
At the interbank foreign exchange market, the local currency opened at 74.43 against the greenback and witnessed an intra-day high of 74.42 and a low of 74.69 during the session.
The rupee finally settled at 74.62, down 19 paise or 0.26 per cent over its previous close of 74.43.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12 per cent up at 95.75.
Brent crude futures, the global oil benchmark, rose 0.33 per cent to USD 88.18 per barrel.
On the domestic equity market front, the BSE Sensex ended 1,545.67 points or 2.62 per cent lower at 57,491.51, while the broader NSE Nifty declined 468.05 points or 2.66 per cent to 17,149.10.
Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs 3,148.58 crore, according to stock exchange data.
Gold Jumps Rs 255 On Global Trends
Gold prices on Monday jumped by Rs 255 to Rs 48,431 per 10 grams in the national capital on strong global trends and rupee depreciation, according to HDFC Securities.
In the previous trade, the precious metal had settled at Rs 48,176 per 10 grams.
Silver also moved up by Rs 80 to Rs 64,793 per kg from Rs 64,713 per kg in the previous trade.
The rupee declined 9 paise to 74.52 against the US dollar in opening trade on Monday.
In the international market, gold was trading with gains at USD 1,841 per ounce and silver was flat at USD 24.25 per ounce.
"Gold prices traded firm with spot gold prices at COMEX trading 0.32 per cent up at USD 1,841 per ounce on Monday," Tapan Patel, Senior Analyst (Commodities), HDFC securities said.