Benchmark indices fell sharply in trade with the Sensex falling by a huge 300 points as global cues remained extremely weak.
Weak closings across Europe after mining stock Glencore slumped 30 per cent pushed indices in Europe lower, while in the US the Nasdaq slumped 3 per cent.
The Sensex was last trading at 25,345 points, down 271 points in trade, while teh Nifty was down 76 points at 7718 points.
Banking stocks in India were weak ahead of the RBI's Monetary Policy. ICICI Bank, State Bank of India, IndusInd Bank and Yes Bank were among the major losers in trade. Infosys was the only gainer from the Nifty.
Tata Motors continued to hit a new 52-week low on worries over Chinese growth rates. The company's Jaguar Land Rover range gets most of its revenues from China.
Metal and mining stocks came in for severe selling pressure after metal behemoth, Glencore saw a 30 per cent slump in Europe.
Coal India hit a new 52-week low of Rs 302 on the NSE. Vedanta, Tata Steel and NMDC were other stocks from the space that lost heavy ground.
Pharma and IT stocks lesser price damage as investors shifted their attention to defensives. Sun Pharma gained ground after a US FDA approval for one of its products.