Today's fall was in addition to more than 12 percent correction seen in previous week. Now the indices crashed nearly 38 percent from their record highs seen in January this year.
The novel coronavirus COVID-19 created havoc in Dalal Street as equity benchmarks saw the biggest single-day fall yet on March 23.
BSE Sensex crashed 3,934.72 points or 13.15 percent to close at 25,981.24, while the Nifty50 plunged 1,135.20 points or 12.98 percent to 7,610.25 and formed a bearish candle on daily charts.
After hitting the 10 percent lower circuit in morning trade, the trading was halted for 45 minutes for the second time in March, which pointed out the fear of a global recession.
Out of top 10 biggest falls, 6 were seen in 2020.
The indices have now crashed nearly 38 percent from their record highs seen in January.
"The markets closed much lower in percentage terms compared to the Asian and European markets, which indicated increased uncertainty regarding the spread of the virus in India after the government indicated that the country was in a crucial phase in its fight against the virus," Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
Ajit Mishra, VP - Research at Religare Broking also said the rising number of cases of coronavirus has definitely impacted economic activity across the globe. "On the domestic front as well, an increase in the number of cases has forced the government to lock down major cities impacting economic activity."
Bank index dropped the most among sectors, falling nearly 17 percent on worries over asset quality after the shutdown of many companies and slowdown in growth due to virus.
BSE Energy, FMCG, Healthcare, IT, Auto, Capital Goods, Consumer Durables, Metal, Oil & Gas and Realty were down 8-15 percent, while midcap and smallcap indices were down more than 12 percent.
"Going forward, we expect the markets would continue to remain volatile as the increase in the number of cases in India would lead to selling pressure," Ajit Mishra said.
Meanwhile, market participants would pin their hopes on stimulus package from the government to reduce the economic impact of coronavirus cases, he added.
Foreign institutional investors net sold more than Rs 51,000 crore worth of shares in March so far, the highest ever in a single month.
On the global front, Asian markets - China's Shanghai Composite, Hong Kong's Hang Seng, Australia's ASX 200 and South Korea's Kospi closed lower by 3-6 percent, while European markets were trading 3-4 percent lower at the time of publishing this copy.The novel coronavirus has taken lives of around 14,500 people globally.