Benchmark indices came crashing down in trade as a host of issues including the Minimum Alternate Tax (MAT), rising crude and disappointing earnings season weighed on sentiments.
A sharp discount in the Nifty Futures on the Singapore Stock Exchange triggered the fall. The Sensex closed the day lower by a huge 725 points and every minor intra day recovery was quickly sold into, suggesting a further fall in the markets.
Investors also completely ignored the passage of the GST Bill in the Lok Sabha.
ICICI Bank fell a huge 5 per cent, while other banks including Axis Bank, Yes Bank, IndusInd Bank and Kotak Mahindra all followed.
Ambuja Cements and Bhel saw huge cracks of near 5 per cent. Of the 50 Nifty stocks, Bharti Airtel was the only stock that gained ground in trade, which suggests extremely bearish sentiments.
Real estate stocks took a severe knock of 4-6 per cent with Unitech, DLF and being the major losers. PSU banking stocks also saw deep cuts of almost six per cent as investors worried that rising crude prices would push rate cuts by the Reserve Bank of India even further.
Bharti Airtel was the only stock that managed to show some resilience after MSCI doubled the scrip's weightage to 2.6 percent in India Index.
Mid cap stocks also were beaten down mercilessly with Century Textiles and Wockhardt both losing 10 per cent each.
Meanwhile, markets in Europe showed some signs of recovery, after slumping almost three per cent on Tuesday.