Benchmark indices fell in trade as exit poll data suggested that the ruling BJP was set to lose the state of Rajasthan and was facing a dead-heat in Madhya Pradesh and Chhatisgarh.
Losses were also seen on account of weak Asian cues, wherein the Japan's Topix, the Hong Kong's Hang Sang and the Shanghai Composite saw deep cuts, on worries of slowing economic growth globally.
Import and Export data from China was not too encouraging, raising worries over a likely slowdown.
Global markets were already reeling under pressure from reports last week on arrests of chief financial officer of a globally renowned smartphone maker.
Banking sector stocks saw deep cuts with ICICI Bank, State Bank of India, PNB and Bank of Baroda losing heavy ground.
Shares of Indian Oil Corporation (IOC) gained in as the company is going to consider buyback of its equity shares.
Kotak Mahindra Bank, which had rallied substantially on Friday, following reports of stake being taken by a foreign partner, saw profit taking. The shares ended down 6.3 per cent at Rs 1,198 on reports that the bank was taking the RBI to court over shareholding issue.
A sharp fall in the rupee, saw IT stocks seeing resilience. TCS, was among the few stocks that saw buying interest and was only ended marginally down, despite weakish market sentiments.
Markets are expected to be volatile ahead of the state election results to be declared on Tuesday.