The benchmark Sensex stock index fell more than 450 points early in Tuesday, following the losses of twins HDFC, ICICI Bank and Kotak Bank, despite negative signals from global markets.
The 30-stock BSE index was trading 470.10 points or 0.95 percent lower at 49,032.31 in initial trades.
Likewise, the wider NSE Nifty fell 145.80 points or 0.98 percent to 14,796.55.
Kotak Bank was the first loser in the Sensex pack, losing more than 2%, followed by HDFC, TCS, ICICI Bank, Bajaj Auto, Tech Mahindra, M&M and Maruti.
In contrast, Sun Pharma, NTPC, ONGC, ITC, Reliance Industries and UltraTech Cement were among the winners.
In the previous session, Sensex finished 295.94 points or 0.60% higher to 49,502.41, and Nifty jumped 119.20 points or 0.80% to 14,942.35.
Foreign institutional investors (FIIs) were net buyers in the capital market as they bought shares worth Rs 583.69 crore on Monday, according to provisional exchange data.
According to Binod Modi, chief strategy officer at Reliance Securities, domestic stocks do not look positive at the moment on weak global signals.
“The US indices, in particular the S&P 500 and the Nasdaq, fell sharply, mainly due to strong selling pressure on high-end tech and growth stocks. While US stocks have consistently gained momentum Supported by strong corporate earnings in the March quarter and the Federal Reserve’s loose monetary policy, the bond market has been generally muted over the past month.
This has started to weigh on investor sentiment, as any increase in bond yield will make valuations of technology or growth stocks quite expensive, he noted.
Elsewhere in Asia, the Shanghai, Hong Kong, Tokyo and Seoul stock exchanges were trading on a negative note in mid-session trades.
Meanwhile, international benchmark Brent crude was trading 0.73 percent lower at $ 67.82 a barrel.