The Sensex dropped a huge 389 points (provisional), while the Nifty closed the day lower by more than 131 points in trade. The rupee scaled past the 63 levels at 63.14 to the dollar at 3.35 PM IST, as emerging market currency continued to haunt foreign investors.
Late last week, the South African Rand, Argentinian Peso, Thai Baht and the Turkish Lira fell sharply and the effects of that spilled onto the current week.
Global markets, particularly Asian markets fell sharply with the Hong Kong's Hang Sang down 2 per cent, the Jakarta Composite down 2.7 per cent and the Japanese Nikkei down more than 2 per cent. All of the other Asian markets were trading lower.
Shares in Tata Motors fell sharply by almost 5 per cent, after the company's managing director Karl Slym's sudden death.
Banking stocks continued their slide, ahead of the RBI's Monetary Policy on Tuesday. Banking stocks ended the day sharply lower were IDBI Bank, Canara Bank, Bank of India and Bank of Baroda. Private sector banking stocks were also badly hit with Yes Bank dropping a huge 7 per cent, while ICICI Bank fell 4 per cent in trade.
Idea Cellular, which is slated to declare results later today was also down in trade by almost 2 per cent.
India's largest FMCG company, Hindustan Unilever gained after the company's results beat market expectations. However, volumes at the company continued to disappoint investors.
Opto Circuits was one stock that surged in today's trade after reports that Goldman Sachs is likely to acquire a 26 per cent stake in the company.
Shares of Glenmark Pharma reacted positively to its numbers which were better than expected. Mid cap stocks were having a bad day in trade with Voltas, Siemens, HDIL and Adani Enterprises all seeing deep cuts of more than 3 per cent.