Benchmark indices fell sharply in trade as news from around the globe, particularly from Europe led to sharp selling pressure across the global markets. European markets were seen trading with cuts of nearly 3 per cent.
European stocks saw selling pressure largely on account of allegations surrounding bank dealings and rising coronavirus infections in some countries.
The Sensex was last seen trading down nearly 700 points, while the Nifty dropped a huge 225 points in trade.
Banking stocks saw the deepest cuts in trade with ICICI Bank dropping nearly 5 per cent and State Bank of India shedding as much as 4 per cent in trade. IndusInd saw the biggest loss of nearly 6.5 per cent in trade. The Nifty realty index saw the biggest cuts of nearly 4 per cent.
The stock of RITES fell 3 per cent, despite reports that the company had been awarded a contract for railway electrification works on a competition basis.
Auto stocks and the metal pack also saw big losses with Tata Motors, Maruti and Ashok Leyland among the losers with cuts of more than 3 per cent in trade.
Among the top performance from the Nifty 500 was Prince Pipes, which saw its stock rallying nearly 7 per cent in trade.