The Sensex and the Nifty plunged in trade as global markets sank, following poor data from China, unexpected rate hikes in Russia and a further fall in crude oil prices.
The rupee also fell to a session low of 63.46 and was its weakest against the dollar since Nov 13, 2013.
ICICI Bank fell more than three per cent, while State Bank of India, Bank of Baroda and private sector lender Yes Bank were the other losers.
SpiceJet fell nine per cent as survival concerns for the airline mounted. Mid cap stocks also dived in trade with Jain irrigation falling a huge 11 per cent, while other stocks that fell were Unitech and Reliance Capital.
IT stocks clearly stood out in trade with TCS surging a huge three per cent, while HCL Tech ended the day higher by 4 per cent. Other tech stocks that rallied were Tech Mahindra and Wipro.
Meanwhile, markets across Asia ended the day lower, except the Shanghai Composite which rallied on hopes of a fresh stimulus. European markets were trading lower with the German DAX, The UK's FTSE and the French CAC trading lower.