The benchmark BSE Sensex extended losses for a second straight day and cracked below 24,000-mark by tumbling almost 374 points in early deals on sustained capital outflows by foreign funds and selling by retail investors.
There were no surprises on the growth front as a government data on Monday showed that Indian economy grew 7.3% in October-December quarter of 2015-16.
The depreciating rupee against the dollar also influenced the weak sentiment in equity markets today.
At 11:17 am, the 30-share index recouped some of the losses but was down about 270 points or more than 1% at 24,015.45. The gauge had lost 329.55 points in the previous session.
In a similar fashion, the NSE Nifty fell below 7,300-mark by losing 106.55 points or 1.44% to 7,280.55 in the early trade. At 11:17 am, the index was down nearly 90 points or more than 1 percent just above the 7,300 mark.
Almost all sectoral indices led by IT, teck, bank and metal are trading in the negative zone with losses up to 3.22%.
Infosys and TCS shares were down nearly 4 percent after rival Cognizant Technology Solutions forecast lowest revenue growth for the current quarter. The company attributed the slow revenue growth to the cut in IT spending by global majors. Investors sold Infosys and TCS fearing a cascading effect on these companies this quarter.
Brokers said the overall market sentiment remained weak in the absence of any positive triggers amid sustained capital outflows by foreign funds.
Besides, a weak trend in other Asian markets following overnight losses in the US with oil prices tanking on fears of a deepening economic slowdown also weighed on the equity markets on Tuesday.
In the Asian region, Japan's Nikkei plunged 5.40% in early trade, while China's Shanghai Composite index and Hong Kong's Hang Seng remained closed for the week-long Chinese new year holiday.
The Dow Jones Industrial Average ended 1.10 per cent lower in Monday's trade.