The BSE benchmark Sensex on Monday plunged by 772.62 points at 1045 hrs following bankruptcy protection filed by US investment bank Lehman Brothers and weak Asian bourses.
The Singapore's Strait Times and Taiwan Weighted Index were down by about 3 to 4 per cent in early trade while other major markets in Asia like as Hong Kong and Japan remained closed for a public holiday.
The Bombay Stock Exchange 30-share barometer tumbled by 772.62 points or 5.5 per cent to rule at 13,228.19 from its last weekend's close after banking stocks led by ICICI and HDFC Bank slipped sharply.
The broader 50-share Nifty of the National Stock Exchange also dipped below 4,000-mark by falling 242.40 points or 5.56 per cent to 3,986.05.
A terror strike in the national capital over the weekend also had adverse impact on the market sentiment. Investors looked unwilling to make any transactions in the prevailing market situation.
Brokers said the collapse of Lehman Brothers and worries of a severe economic recession in the United States virtually shook the global financial markets.
Key stocks such as ICICI Bank, HDFC Bank, State Bank of India, BHEL, RIL, Bharti Airtel, DLF, HDFC, Infosys Technologies, ONGC and Reliance Infra dropped sharply due to heavy selling pressure.