The 50-share Nifty settled below its 200-day moving average of 8,254, a level considered as a strong support by technical analysts for the index on Monday. Blue-chip stocks like ICICI Bank, State Bank of India, HDFC, Reliance Industries and Larsen & Toubro led the losses.
The Sensex fell over 250 points on the back of broad-based selling pressure.
Salil Sharma, technical analyst and partner with Kapursharma.com, said, "If Nifty breaks 8,200 on the downside then it could head towards its next support level 7,970."
The markets have been on a downward spiral since quite some time now. The Sensex has fallen over 1,800 points on concerns over retrospective taxation and lower-than-expected January-March earnings so far.
Foreign institutional investors (FIIs) have since April 15 sold shares worth over Rs 5,000 crore.
"Earnings so far have been disappointing, we are hoping the manufacturing sector would support with better results in the coming days," said G Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.
Meanwhile, the selling pressure was visible across the sectors. Oil & gas, pharma, capital goods and banking stocks were amongst the worst hit in trades today.
The BSE oil & gas index plunged 2.5 per cent in the intraday deals on the back of selling in Reliance Indistries, Cairn India, BPCL, GAIL India and ONGC.
Banking stocks also edged lower in trades today. The Bank Nifty fell 1.3 per cent after India's largest private sector lender, ICICI Bank reported its fourth quarter numbers. The bank reported net profit of Rs 2,922 crore which was better than what the analysts had expected but rise in bad loans of the bank weighed upon the positive results and the stock fell 2 per cent to close at Rs 302.
State Bank of India, HDFC, Kotak Mahindra Bank, Bank of Baroda, Yes Bank and IndusInd Bank also closed on a negative note.
From the Nifty-50 basket of stocks, 42 stocks declined while 8 advanced. BPCL was the top loser on the Nifty, the stock fell 7 per cent to Rs 726. Cairn India, Asian Paints, HUL, BHEL, Dr Reddy's Labs, ACC, Sun Pharma and GAIL India also closed 2-5 per cent lower on the National Stock Exchange.
On the other hand, Maruti Suzuki was the top Nifty gainer, the stocks advanced 3 per cent to close at Rs 3,650 after India's largest car manufacturer reported net profit of Rs net profit of Rs 1,284 crore. An NDTV poll of analysts had expected net profit for the January-March period to come in at Rs 1,070 crore.
Sesa Sterlite, Wipro, Idea Cellular and PNB were also among the notable gainers.
The broader markets saw heavy selling in trades today. The BSE mid-cap index plunged 2.1 per cent and the small-cap index nosedived nearly 3 per cent.
The overall breadth was extremely negative as 2,063 stocks declined while 664 stocks advanced.
The Sensex finally closed 261 points lower at 27,177 and the Nifty declined 91 points to shut shop at 8,214.
(With inputs from Reuters)
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