Equity benchmark indices extended early losses and closed 3.4 per cent lower on Monday as the country extended nationwide lockdown till month-end to curb the spread of coronavirus (COVID-19) pandemic.
Besides, the government's set of measures under its stimulus package fell short of market expectations due to the lack of enough measures to boost immediate demand and consumption.
The BSE S&P Sensex closed 1,069 points or 3.44 per cent lower at 30,029 while the Nifty 50 edged lower by 314 points or 3.43 per cent at 8,823.
Except for Nifty IT, all sectoral indices at the National Stock Exchange were in the red with Nifty private bank down by 6.9 per cent, PSU bank by 5.9 per cent, financial service by 6.6 per cent and auto by 5.5 per cent.
Bank stocks tumbled after the government said it will halt fresh insolvency cases for a year to avoid bankruptcies from firms hit by the COVID-19 pandemic.
IndusInd Bank was down by 9.6 per cent to close the day at Rs 378.35 per share while Axis Bank slipped by 7 per cent and ICICI Bank by 6.8 per cent.
Auto majors Maruti Suzuki and Bajaj Auto skidded by 7.1 per cent and 6.9 per cent. The other prominent losers were Eicher Motors, Bharat Petroleum Corporation, UltraTech Cements and HDFC.
However, those which gained were Cipla, Tata Consultancy Services, Bharti Infratel, Infosys and HCL Technologies.
Meanwhile, Asian shares were up and oil prices hit a five-week peak as countries' efforts to re-open their economies raised hopes that the world could soon emerge from recession.
Japan's Nikkei rose by 0.48 per cent while Hong Kong's Hang Seng was up by 0.58 per cent and South Korea's Kospi ticked up by 0.51 per cent.