The BSE Sensex closed the day lower by 253 points, at 15965 points, while the Nifty closed the day lower by 83 points.
The sharp fall in today's trade was once again on account of Europe and less on domestic factors (poor GDP), which the markets had discounted in early trade.
A business survey on Friday revealed that the euro zone's manufacturing sector contracted at the highest pace in nearly three years in May, while Italy's April jobless rate reached a new record high of 10.2 percent. The DAX was one of the worst affected and was down more than 2% in trade at 3 PM IST.
In the domestic markets shares of Asian Paints, Cain India, Siemens and Ranbaxy Laboratories fell sharply. The markets began cautiously in trade slightly lower, as the markets discounted the GDP drop, however, they dropped sharply soon after Europe opened at 12.30 PM IST.
The Indian markets had dropped by more than 7% in May and the first trading day in June has failed to buck the falling trend.