Equity benchmark Sensex plunged over 800 points in opening session on Monday dragged by losses in banking stocks as the government's fiscal stimulus package failed to revive confidence in domestic investors.
After hitting a low of 30,265.67, the 30-share index was trading 731.91 points or 2.35 per cent lower at 30,365.82.
Similarly, NSE Nifty slumped 226.90 points, or 2.48 per cent, to 8,909.95.
ICICI Bank was the top laggard in the Sensex pack, cracking around 6 per cent, followed by Axis Bank, SBI, Bajaj Finance, Titan, Maruti, IndusInd Bank, PowerGrid and ONGC.
On the other hand, Infosys and TCS were trading with gains.
In the previous session, the BSE barometer settled 25.16 points or 0.08 per cent lower at 31,097.73, and the broader Nifty slipped 5.90 points, or 0.06 per cent, to close at 9,136.85.
Foreign portfolio investors offloaded equities worth Rs 2,388.04 crore in the capital market on Friday, provisional exchange data showed.
Doubts over the effectiveness of the fiscal stimulus package, extension of the nationwide lockdown and spike in COVID-19 cases in the country weighed on investor sentiment, traders said.
The government, in its first four tranches of the stimulus package, focussed on credit line to small businesses and new fund creations to be shouldered by banks and financial institutions with very little extra budget spending.
In the last set of measures, Finance Minister Nirmala Sitharaman on Sunday announced plans to privatise PSUs in non-strategic sectors and suspend loan default-triggered bankruptcy filings for one year, and also gave a Rs 40,000-crore hike in allocation for the rural employment guarantee scheme to provide jobs to migrant workers.
Further, the government last night extended the lockdown for two more weeks with the fourth phase providing more relaxations outside the containment zones.
Meanwhile, the number of COVID-19 cases in India spiked to 96,169, while the death toll rose to 3,029, according to the health ministry.
Globally, the number of cases linked to the disease has crossed 47.13 lakh and the death toll has topped 3.15 lakh.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading on a positive note.
International oil benchmark Brent crude futures were trading 2.77 per cent higher at USD 33.40 per barrel.