Earlier on Tuesday, France's Cac 40 fell 3.1%, while the UK's FTSE 100 lost 2.5% and Germany's Dax also lost about 2.5%.

Renewed fears of rising bond yields in Europe, particularly Spain and Italy have dampened sentiments. Spanish bond yields hit a new high for this year as concerns have returned about the country's ability to repay its debts.

Foreign institutional investors remained sellers in the cash market on Tuesday and have not been making the huge purchases they had done in January, February and March. Metals and commodities bore the brunt with some major cuts in stocks like Sterlite, Sesa and Hindalco were deep in the red.

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