Equity benchmark Sensex plummeted 5.94 per cent or 2,002 points on Monday, tracking massive selloffs in global markets amid rising US-China tensions.
After a highly volatile session, the 30-share BSE index settled at 31,715.35, plunging 2,002.27 points, or 5.94 per cent.
Similarly, the broader NSE Nifty suffered a heavy loss of 566.40 points, or 5.74 per cent, to settle at 9,293.50.
ICICI Bank was the top laggard in the Sensex pack, sinking over 10 per cent, followed by Bajaj Finance, HDFC, IndusInd Bank, Axis Bank and Maruti.
Shares of Reliance Industries fell over 2 per cent after the oil-to-telecom conglomerate on Thursday posted its biggest ever drop in quarterly net profit.
Its net profit in January-March dropped 37 per cent to Rs 6,546 crore, the lowest in three years.
Meanwhile, earlier in the day, Silver Lake - one of the world's largest tech investors - agreed to invest Rs 5,655.75 crore to buy a 1.15 per cent stake in Jio Platforms.
Bharti Airtel and Sun Pharma were the gainers in the BSE index.
According to Narendra Solanki, Head- Equity Research (Fundamental) at Anand Rathi, the domestic markets opened lower taking negative cues from its global peers in Asia.
Claims by the US with regard COVID-19 sparked fears of a renewed trade war and fresh tussle with China over its role in the pandemic spread.
Although the major markets in Japan and China were closed for holidays, stocks in other Asian markets fell as tensions between the US and China weighed on investor sentiment, Solanki said.
Bourses in Hong Kong and Seoul were plunged up to 4 per cent, while stock exchanges in Europe opened with significant losses.
Back home, sentiments also remained downbeat after the country's manufacturing activity growth declined sharply in the month of April 2020, amid national lockdown restrictions to help stem the spread of coronavirus infections, he added.
The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) fell to 27.4 in April, from 51.8 in March, reflecting the sharpest deterioration in business conditions across the sector since data collection began over 15 years ago.
According to analysts, the market has realised that the cascading effect of the extended restrictions on the domestic economy and corporate earnings is much more than anticipated.
The government on Friday extended the nationwide lockdown till May 17.
The death toll due to COVID-19 in India rose to 1,373 and the number of cases climbed to 42,533 in the country, according to the health ministry.
The global tally of coronavirus infections was over 35 lakh, with around 2.47 lakh deaths.
Meanwhile, the rupee depreciated by 64 paise to provisionally settle at 75.73 against the US dollar.
International oil benchmark Brent crude futures were trading 2.95 per cent lower at USD 25.66 per barrel.
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