Benchmark indices ended the day lower for the 4th straight day, marking a horrible week which has seen the Sensex shed almost 5 per cent so far this week.
The Sensex ended the day lower by a huge 554.50 points, at 24851.83 points, as the Chinese were shut for trading after a 7 per cent fall in the CSI 300.
Indian stocks, followed a global market rout with oil and gas stocks among the worst hit. ONGC and Cairn India fell 5 per cent each, after crude oil dropped to a new 11 year low.
Shares in Tata Motors also fell 5 per cent, after worries over a sharp slowdown in China. The company gets a bulk of its revenues, particularly of Jaguar Landrover from China.
Banking stocks also nosedived in trade with ICICI Bank, State Bank of India, Punjab National Bank and Canara Bank all hitting a new 52-week low.
The worst affected were the midcap stocks, with the index seeing a cut of near 3 per cent. Jindal Steel was the biggest loser from the space down more than 7 per cent. JP Associates and Reliance Capital fell 7 per cent each.
Meanwhile, markets across Asia ended the day sharply lower with most of the indices, closing lower. The Hong Kong's Hang Sang was down 3 per cent, while the Nikkei closed 2.33 per cent lower and the Singapore Strait Times was trading 2.3 per cent lower.