Sensex and Nifty fell over 5.5% each on Monday tracking weak cues from overseas trend and subdued earnings season.
Reversing trend after 4-days of gains, Sensex closed 2,002 points or 5.94% lower at 31,175 and NSE Nifty lost 566 points or 5.74% to 9,293.
Experts said earnings reports and global cues would continue to dictate the local market's trend.
Asian markets faced sharp sell-off on Monday amid growing concerns over China-US trade war tariffs, in response to the COVID-19 pandemic. Sentiments turned negative after US President Donald Trump threatened China to impose new tariffs.
Wall Street sold off sharply on Friday after Trump, as well as US Secretary of State Mike Pompeo, blamed China for creating coronavirus in a Chinese laboratory.
Ajit Mishra, VP - Research, Religare Broking said," Above all, the news of US president contemplating fresh tariffs on China over its mishandling of the pandemic triggered a sharp decline in the US markets which further worsened with the warning from Apple and Amazon."
Domestic equity indices were also subdued, taking cues from the latest March quarter earnings that came below street estimates.
While RIL share price fell 3.22% intraday after Q4 results, Hindustan Unilever declined 5.26%. Tech Mahindra stock lost 7.8% after Q4 earnings. Apollo Pipes share price was down 7.5%, followed by ICICI Lombard General Insurance that fell 6.6% and AU Small Finance Bank shares that traded 5% lower.
Pharma stocks outperformed in today's session, the only index that closed in green territory. All the other indices ended with losses with banking, metals and consumer durables being the top losers.
Among pharma stocks, Aurobindo Pharma rose 4.43% while Cipla was up 3.7%, followed by 2.15% gain in Cadila and 1.43% rise in Biocon. Sun Pharma also closed as the top gainer on Nifty today, quoting 0.33% at the session's end.
While metal, banking and financial indices dropped over 8% each, PSU Banking, realty and auto were down 7% each, followed by 5% fall in media.
Auto shares fell sharply today, as most of the industry majors posted zero domestic sales for the April month, due to the virus-induced lockdown. While Maruti closed 8.75% lower, Eicher Motors fell 6.45%, and M&M ended 2.66% lower.
Ajit Mishra VP - Research, Religare Broking said, "The sharp cut in the index in early trade on Monday could be a shock for many and that might result in erratic swings. Technically, 9200 would be a critical support zone for the Nifty index."
Amid weakness in equity markets, rupee also opened 61 paise lower in the currency market today at 75.73 per dollar. The local currency later closed at 75.71 against the last closing of 75.12 per US dollar.
Traders said the extension of the lockdown till May 17, coupled with weak economic key data also impacted the markets. Meanwhile, the nation has reported a total of 42,533 coronavirus cases, of which 11,706 have been cured or discharged patients. The death toll in the country has risen to 1,373.
Nifty today saw closing in the support zone at 9300-9100 and India VIX again saw a notable spike to close around the 44 mark, said Sameet Chavan Chief Analyst-Technical and Derivatives, Angel Broking.
Commenting on Nifty's near term technical outlook, Sameet Chavan said, "In case of further escalation, we may see Nifty correcting towards 9100 - 9000, whereas on the flipside, 9390 followed by 9450 would be seen as immediate hurdles."