Benchmark indices came crashing down in the final hour of trade, as banking stocks plunged on worries over deterioration in asset quality, following new norms that would be applicable in the next quarter.
The Sensex ended the day lower by 318 points at 24,455 points, while the Nifty fell 99 points in trade. The bank Nifty crashed by a huge 2.6 per cent, as persistent selling in Axis Bank, State Bank of India and ICICI Bank saw huge selling pressure.
In fact, Canara Bank, Bank of India, Punjab National Bank, State Bank of India, ICICI Bank, Syndicate Bank and most banks touched 52-week lows.
Vedanta was the biggest loser from the Nifty dropping a huge 8 per cent. The broader market saw a huge sell-off with the mid cap and the small cap facing the music. In fact, the small cap index with today's loss has almost plunged 10 per cent.
Shares in Hindustan Unilever also fell sharply, after the company reported a lower than expected net profit. The stock ended the day 2 per cent lower.
The biggest worry for the markets was the huge plunge in midcap stocks, with the index falling more than 3 per cent. Most of the fall in the index was led by PSU banking and metal stocks.
Oil and gas stocks ended the day slightly weak with Cairn India and ONGC among the biggest losers in trade.
Meanwhile, European markets were trading lower, following a drop in crude oil. The German DAX, French CAC and the UK'S FTSE were all lower in trade.