Equity benchmark Sensex surrendered all its early gains to end 262 points lower on Tuesday due to emergence of a sudden sell-off in financial stocks at the fag-end of the session.
Slumping over 810 points from the day's high, the 30-share BSE index settled 261.84 points or 0.83 per cent lower at 31,453.51, and the NSE Nifty fell 87.90 points or 0.95 per cent to close at 9,205.60.
State Bank of India (SBI) was the top laggard in the Sensex pack, shedding over 4 per cent, followed by Bajaj Finance, Asian Paints, Axis Bank, Kotak Bank and ICICI Bank.
On the other hand, M&M, PowerGrid, ONGC and Reliance Industries were among the major gainers.
According to traders, the market extended its losses to another session led by downbeat sentiment in financial stocks.
Despite positive cues from global market, domestic investor sentiment remained volatile amid rising number of COVID-19 cases in the country, they said.
Bourses in Hong Kong ended over 1 per cent higher, while those in Shanghai, Tokyo and Seoul were closed for a holiday.
Stock exchanges in Europe were trading with significant gains.
In India, the death toll due to COVID-19 rose to 1,568 and the number of cases climbed to 46,433 on Tuesday, according to the health ministry.
The number of cases around the world linked to the disease has crossed over 35.84 lakh and the death toll has topped 2.51 lakh.
Meanwhile, the rupee surged 10 paise to provisionally close at 75.63 against the US dollar.
International oil benchmark Brent crude futures rallied 7.02 per cent to USD 29.11 per barrel.