Extending its losing run for a second straight day, the BSE Sensex slumped by 266.44 points to 24,020.98 on sustained foreign fund outflows, while IT stocks fell after Cognizant lowered revenue guidance for the year.
The BSE Sensex after opening lower at 24,076.85 continued to slide on selling in blue-chips, forcing the index to touch a low of 23,919.47 before settling at 24,020.98, showing a loss of 266.44 points or 1.10 per cent. This was index's weakest closing since January 21.
The 50-share NSE Nifty dipped below the psychological 7,300-mark by tumbling 89.05 points or 1.21 per cent to close at 7,298.20.
As many as 20 Sensex stocks closed with losses, including Coal India, Tata Motors, TCS, Dr Reddy's, Infosys, SBI, Maruti Suzuki, Axis Bank, Cipla, Wipro, L&T and HDFC Bank.
However, Lupin, Sun Pharma, NTPC, ONGC, GAIL, Bajaj Auto, Bharti Airtel, Tata Steel, Hero MotoCorp and ICICI Bank were among the gainers.
Among BSE sectoral indices, IT suffered the most at 3.40 per cent after a disappointing quarterly forecast from Cognizant followed by teck (2.98 pc), metal (2.47 pc), auto (1.78 pc), realty (1.50 pc), capital goods (1.32 pc) and banks (1.23 pc).
The broader markets performed weak with the BSE mid-cap index falling 1.91 per cent and small-cap shedding 1.34 per cent.
Disappointing corporate earnings and fears of a global slowdown forced investors to dump risky assets and move to safe haven options.
In overseas market, most Asian markets plunged, tracking overnight sell-off in the US after oil prices tanked again on fears of a deepening economic slowdown.
Japan's Nikkei crashed over 918.86 points or 5.40 per cent while Chinese and Hong Kong markets remained closed for the Lunar New Year holiday.