Panic selling frenzy over regulatory concerns hit Indian markets where it hurts the most, with the benchmark Nifty plunging 161 points -- its biggest single-day fall in two weeks -- which closed below the key psychological 8,400 level.
Fears resurfaced about the risk of capital outflows on worries that SC-appointed Special Investigation Team (SIT) recommended tightening of norms involving participatory notes. A falling rupee only queered the pitch.
Uncertainty over big-bang reforms, pricey valuations and lacklustre earnings numbers so far didn't help matters amid volatility ahead of July F&O expiry.
The selling was widespread as all sectoral indices came under intense sell-off pressure even as mid-cap and small-cap too melted.
A crash in Chinese equities had a spillover effect, which spooked financial markets across Asia. Slower global economic growth momentum further dampened investor appetite.
Key indices remained subdued throughout the session.
Even a pep talk from Finance Minister Arun Jaitley that the government will not take any "knee-jerk" decision that will adversely impact country's investment climate failed to lift spirits.
The battered sentiment pulled down the broader Nifty by a massive 161.55 points, or 1.88 per cent, to close at 8,361.00 after touching an intra-day low of 8,351.55.
Sectorally, infra led the losses, tumbling over 2.90 per cent, followed by energy, metal, realty and banking. However, the media index stood firm, led by key heavyweights like Sun TV and Zee.
The broader markets, slipped into the red too, with mid-cap and small-cap sliding 1.99 per cent and 1.22 per cent, respectively.
ICICI Bank suffered the most, followed by L&T, Infosys, Axis Bank, HDFC and Reliance.
Tech Mahindra and Asian Paints were the bright spots.
Turnover in the cash segment dropped to Rs 16,417.44 crore, from Rs 17,807.89 crore last Friday.
The total market capitalisation of Nifty stood at Rs 99.55 lakh crore.
