Benchmark indices slumped as Greece imposed capital control and banks were asked to close for a week, to avoid financial panic.
Asian markets sank on these fears and the Sensex cracked a huge 505 points, while the Nifty lost 155 points and was last trading at 8222 points.
Apart from BPCL there was not a single stock from the Nifty that gained ground. In fact, BPCL gained largely on the back of a sharp fall in crude prices.
Banking stocks were the worst hit with ICICI Bank, Axis Bank and Punjab National Bank all losing 3-4 per cent in early trade.
IT stocks that had remained strong on Friday gave up gains and were trading sharply lower. Infosys, TCS and HCL Tech all lost ground.
The sharp fall also extended to the mid caps with Bata India, Century Textiles, Exide Industries and Karnataka Bank all losing more than 4 per cent each.
The realty, banking, auto and capital goods segment were all down 2 per cent each.
Meanwhile, markets across Asia also fell sharply with the Hong Kong's Hang Sang and the Japanese Nikkei down almost 2 per cent each on fears of a Greece exit from the Eurozone.