Benchmark Sensex tanked 736 points while Nifty fell below the 22,000 level on Tuesday following a sell-off in index majors TCS, Infosys and RIL and weak Asian trends as Japan's central bank hiked rates for the first time in 17 years.
The 30-share BSE Sensex tanked 736.37 points or 1.01 per cent to settle at more than a month's low of 72,012.05.
As many as 23 Sensex shares declined while seven advanced.
The index declined by 815.07 points or 1.12 per cent to slide below 72,000 at 71,933.35 in day trade.
The broader NSE Nifty slumped 238.25 points or 1.08 per cent to settle at a month's low of 21,817.45.
As many as 41 Nifty shares closed in the red while nine ended with gains.
The key indices opened on a weak note amid losses in Asian markets as the Bank of Japan hiked interest rates for the first time in 17 years.
Investors were also cautious ahead of the US Fed interest rate decision this week, analysts said.
Sharp losses in TCS also dragged the indices to month's lows.
Tata Consultancy Services tanked over 4 per cent as its promoter Tata Sons sold around 2.3 crore shares, or 0.65 per cent of equity stake, in the IT services major through block deals.
Other IT stocks Infosys, Wipro, Tech Mahindra and HCL Technologies also closed lower.
IndusInd Bank, Reliance Industries, Nestle, Power Grid, ITC, Tata Motors and UltraTech Cement were the other major laggards.
Bajaj Finance, Kotak Mahindra Bank, HDFC Bank, Bajaj Finserv, Titan and Bharti Airtel were the gainers.
Vinod Nair, Head of Research, Geojit Financial Services said, “Following the BoJ's decision to hike interest rates for the first time in 17 years, the Asian peers' mood turned sour, which pulled the Indian market to continue its recent pessimism.”
The correction in the domestic market has also been triggered by concerns over premium valuations and the delay of rate cuts by the US Fed due to higher-than-expected inflation, which is evident from the upward trend in the dollar index, he added.
"Nifty fell to its lowest level in over a month on March 19," said Deepak Jasani, Head of Retail Research, HDFC Securities.
Analysts said investors are exercising caution as they await the upcoming US Fed meeting, seeking indications on the potential timing of a reversal in the rate cycle.
Additionally, the gradual increase in crude oil prices is further dampening market sentiment.
In the broader market, the BSE midcap gauge declined 1.36 per cent and the smallcap index fell by 1.04 per cent.
All indices ended lower. IT index dived 2.66 per cent, teck fell by 2.36 per cent, telecommunication (1.74 per cent), services (1.60 per cent) and utilities (1.57 per cent).
A total of 2,583 stocks declined while 1,234 advanced and 111 remained unchanged on the BSE.
Also, 364 stocks hit their lower circuit limit, while 235 firms reached their upper circuit level.
In Asian markets, Seoul, Shanghai, and Hong Kong settled lower, while Tokyo ended in the green.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,051.09 crore on Monday, according to exchange data.
Global oil benchmark Brent crude dipped 0.40 per cent to $86.54 a barrel.
