The benchmark BSE Sensex plunged by more than 400 points in the late morning session to crack below the 26,000-level as global political and economic headwinds hit the investor sentiment.
Asian stocks took a major hit after Chinese manufacturing data contracted for a fifth straight month. Consequently, Shanghai index plunged more than 7 per cent and was halted for the rest of the day.
Besides, crude prices rising by 2 per cent on Saudi Arabia severing ties with Iran also had its impact on India equities.
Meanwhile, domestic manufacturing sector contracted for the first time in 25 months in December as Chennai floods triggered significant decline in output and new orders.
In late morning deals, the benchmark BSE Sensex tumbled by 411.33 points or 1.57 per cent to 25,749.87.10. The index had resumed lower and hit a high of 26,116.52 earlier in the day.
The 50-share Nifty also fell by 129.90 points or 1.63 per cent to 7,833.30
Shares of telecom, healthcare, banks, energy, industrials, IT, teck, oil&gas, FMCG, auto and capital goods sectors came under heavy selling pressure.
Major losers from the Senses were Bharti Airtel (3.45 per cent), Tata Motors (3.39 per cent), ICICI Bank (3.10 per cent), Sun Pharma (2.10 per cent) and HDFC (2.09 per cent).
Meanwhile, foreign investors bought shares worth Rs 228.11 crore last Friday, provisional data showed.
Overseas, China led decline in Asian markets after the latest data showed that the falling Caixin China manufacturing purchasing managers' index (PMI) in December. Besides, the US stock markets were shut on Friday for New Year's Day Holiday.
