The 30-share Sensex, which lost nearly 389 points in yesterday's trade, plunged by 334.27 points, or 2.02 per cent, to 16,153.97 in opening trade today.
In a similar fashion, the wide-based National Stock Exchange Nifty index declined by 91.20 points, or 1.84 per cent, to 4,852.45.
All the sectoral indices were trading in the negative zone with losses of up to 2.14 per cent, led by financial and metal stocks.
Brokers said the market sentiment was badly dampened by reports that industrial output contracted during October, in addition to a weakening trend on other Asian bourses following overnight losses in the US on fading hopes for a speedy resolution to the euro zone's debt crisis.
In the Asia region, Hong Kong's Hang Seng index was down by 1.90 per cent and Japan's Nikkei index lost 1.70 per cent in morning trade today.
The US Dow Jones Industrial Average ended 1.63 per cent lower in yesterday's trade.