The benchmark Sensex dipped below the psychological 14,000 point level to trade at a six week low on the BSE on Wednesday as economic jitters swept global financial markets, raising fears of foreign capital outflows.
The Sensex tanked 401.30 points, or 2.83 per cent, to 13,769.15, after touching the day's lowest of 13,701.76, a level last seen on May 21.
The 50-share National Stock Exchange index Nifty dropped 123.25 points at 4,078.90, after touching the day's low of 4,061.10.
The market turned bearish after the budgetary proposals announced on Monday revealed a higher deficit, and the Sensex recorded the biggest fall of the year.
Selling was further fuelled on Wednesday on weakening global stock market trends after an unexpected drop in Japanese machinery orders sparked concerns that global economic recovery may falter.
Some firmness in auto, cement and power stocks saved the market from any further fall. Among the 30 BSE index stocks, 24 counters recorded heavy losses while six ended with gains.
Among the major losers, realty, metals, capital goods and banks plunged between 8.47 and 4.09 per cent.
Reliance Industries dropped 1.40 per cent, Infosys Technologies 1.93 per cent, ICICI Bank 5.82 per cent and Larsen and Toubro by 5.84 per cent. The four together carry nearly 35 per cent weight in the key index.