Sensex plummeted by over 1,000 points and the rupee dropped to a two-year low on Monday in the early morning trade, amidst worldwide rout.
Shanghai shares crashed 8% over the concerns that the Chinese economy had slowed down more than earlier believed.
Taking a hint from worldwide markets, the Sensex plummeted 1,006.54 points (3.67%) to 26,359.53. This is the biggest drop in-day trade in the year 2015.
The rupee nosedived to a new two year low as it opened at 66.47 to the dollar and currently stands at 66.50.
NSE Nifty plunged lower than the 8,000-level by dropping 309.05 points, (3.72%) to 7990.90 in trade. ONGC and Tata Motors lost the maximum - up to 6%.
On Friday, Sensex closed at 27,366 points and opened on Monday at 26,730 points.
Bernard Aw, market strategist at IG, Singapore's forex trading houses said in a note: "We are going to see a fearful Asia today. Risk selling activity is expected to blanket the regional markets. Geopolitical tensions in the Korean peninsula are going to add to weak sentiments."
Among the significant Sensex losers, Reliance dropped by 4%, Infosys by 3%, Tata Motors by more than 6%, ICICI bank by 4.5%, HDFC by 3% and Axis Bank by 5.3%.
GAIL Ltd as well as Vedanta dropped up to 6%.
Among the Asian markets, %, Japan's Nikkei plummeted 3.10%, Hong Kong's Hang Seng dropped 3.26% and Shanghai Composite 8.35%.
The US Dow Jones Industrial Average closed at 3.12% down in trade on Friday.