In a highly volatile trade, market benchmark BSE Sensex dropped over 109 points on Monday and the Nifty slipped below the 8,000-mark due to selling by funds and retail investors ahead of the release of June quarter GDP data and weakness in domestic currency.
Moreover, a mixed trend in other Asian markets with China's index falling 0.82% after the US Fed hinted that it may go ahead with an interest rate hike in September, also weighed.
The 30-stock BSE index opened on a positive note at 26,469.42 and advanced to touch the day's high of 26,504.73.
However, it gave up early gains and slipped into the red to hit a low of 26,215.16. The index finally settled 109.29 points or 0.41% lower at 26,283.09. The gauge had gained 677.72 points in last two sessions.
On similar lines, the NSE Nifty dipped below the 8,000 - mark by falling 30.65 points or 0.38% to 7,971.30 after shuttling between 8,043.60 and 7,947.95, intra-day.
Sentiments turned weak ahead of India's gross domestic product (GDP) data for June quarter, to be released later in the day, and concerns over the deficient rains, brokers said.
On monthly basis, the BSE Sensex has plunged by 1,831.47 points or 6.51% and the NSE Nifty dropped by 561.55 points or 6.58%.At the forex market, the rupee was trading 28 paise lower at 66.42 against the dollar (intra-day).
BHEL was the worst Sensex performer at 3.45%, followed by Bharti Airtel 2.14%.
Other losers included Hindalco (2.08 pc), ICICI Bank (1.92 pc), RIL (1.65 pc), ONGC (1.54 pc), Tata Steel (1.51 pc), Infosys (1.40 pc), Maruti Suzuki (0.89 pc), SBI (0.86 pc), HDFC (0.80 pc), M and M (0.79 pc) and L and T (0.72 pc).
Bucking the trend, pharma stocks including Cipla, Dr Reddy's, Lupin and Sun Pharma surged up to 3.55%.
Besides, a mixed closing at other Asian markets and lower opening European markets, too influenced sentiments.Among BSE sectoral indices, power fell the most by losing (1.54 pc), followed by realty (1.34 pc), infra (1.31 pc), capital goods (1.08 pc), auto 0.77 pc), consumer durables (0.49 pc), FMCG (0.40 pc) and banking (0.34 pc).
Selling activity also re-emerged in the broader markets with the BSE mid-cap index declining 0.23% and small-cap dropping by 0.20%.
Meanwhile, foreign investors bought shares worth Rs 56.41 crore on Friday.