Indian equity benchmarks succumbed to an unprecedented wave of panic selling spree following fears of an imminent rise in US interest rates with the BSE-Sensex and the NSE-Nifty tumbling over two per cent - their biggest fall in two months.
Stronger-than-expected US jobs data reinforced heightened concerns that the Federal Reserve could raise interest rates sooner than expected mainly rattled investors confidence.
Rupee's plunge too kept the market on a shaky ground.
After a gap-down opening, the key indices kept tanking as falling key supported levels triggered fresh short-selling.
Rich valuations after recent record breaking rally and lack of definite cues with two major events - the Union Budget and the much awaited rate cut by the central bank out of the way, domestic investors preferred booking profits.
The Sensex opened at 29,316.54 and fluctuated between a high of 29,321.06 and a low of 28,799.76 before concluding at 28,844.78, a massive fall of 604.17 points, or 2.05 per cent over last close. Previously, it had plunged by 854.86 points or 3.07 pct on January 6, 2015.
The NSE flagship index, CNX Nifty also plummeted by a massive 181 points, or 2.03 per cent to end at 8,756.75 after touching a intra-day low of 8,740.45.
Elsewhere in the region, barring Shanghai Composite which rallied on the back of strong export data, most equities remained under intense selling pressure with key indices in Hongkong, Japan, Singapore, Taiwan finished lower between 0.17 to one per cent.
European markets too were trading lower in their late morning deals. The CAC was down by 0.76 per cent , the DAX by 0.38 per cent and the FTSE by 1.42 per cent on the back of fall on Wall Street last weekend.
The severe bout of selling pressure that engulfed the market took a heavy toll of all sectoral indices with Bankex plunging by 3.01 per cent. It followed by power 2.94 per cent, capital goods 2.74 per cent, realty 2.58 per cent, metal 2.40 per cent, IT 2.06 per cent, Technology 1.92 per cent, PSU 1.78 per cent, Oil and Gas 1.67 per cent Auto 1.08, and FMCG 0.74 per cent.
However, Healthcare bucked the trend and gained by 0.30 per cent.
In the 30-share Sensex pack, 26 scrips ended with heavy losses, while remaining 4 ended higher.
The total market breadth remained weak as 1,889 stocks ended in negative terrain, 977 ended in positive while 107 ruled stable.
Major laggards were, Sesa Sterlite tumbled by (5.21 per cent ) Hindalco (4.70 per cent ), BHEL (4.55 per cent ) GAIL (4.52 per cent), ICICI Bank (4.33 per cent ), Axis Bank (4.05 per cent) NTPC (3.74 per cent), Tata Power (3.52 per cent), L&T (3.43 per cent) Infosys (2.72 per cent), HDFC Bank (2.39 per cent ), ITC (2.21 per cent), Tata Steel (2.04 per cent), TCS (1.95 per cent), Coal India (1.92 per cent), M&M (1.84 per cent), Reliance (1.78 per cent), HDFC (1.73 per cent), Wipro (1.29 per cent), Bharti Airtel (1.25 per cent), ONGC (1.16 per cent ), Tata Motors (1.12 per cent) SBI (1.02 per cent) and Cipla (0.63 per cent ).
Among the notable gainers, HUL rose by (3.76 per cent), Dr Reddy's (0.58 per cent), Sun Pharma (0.41 per cent) and Maruti (0.01 per cent).
The total turnover on the BSE jumped to Rs 4,610.46 as compared to 3,647.8 crore last Thursday.