The Sensex was trading lower by 232 points, while the Nifty lost 73 points in early trade and was at its lowest level in 1-year.
The HDFC twins continued to slide for a second day in a row with HDFC down 5 per cent and HDFC Bank down 1 per cent in early trade.
The Bank Nifty was once again badly battered with notable losers from the space being Yes Bank, ICICI Bank, Axis Bank, Canara Bank and State Bank of India. Most of the blue chip banking stocks hit their 52-week low in trade.
Software stocks continued to hog the limelight and were up once again in trade today with Infosys and TCS, both gaining 1 per cent in trade.
Oil and gas stocks also came in for some selling pressure with rising crude prices playing spoil sport. ONGC dropped more then 5 per cent in trade, while BPCL was down 6 per cent in early trade.
Realty stocks were also badly hit with DLF dropping 2 per cent in trade and Unitech also slumping 2 per cent.
Heavyweight, ITC and Reliance did not lend any support to the falling market with the former dropping more then 2 per cent, while Reliance fell 1.35 per cent. However, FMCG major Hindustan Unilever was resilient and was trading with gains.
Meanwhile, markets in Asia were trading sharply lower on fears of a military strike in Syria by the West. The Japanese Nikkei and the Jakarta Composite were both down more then 2 per cent in trade.