Both the key indices closed the day's trade with losses of more than one per cent each, as heavy selling pressure was witnessed in stocks of automobile, banking and capital goods companies.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) slipped by 108.50 points or 1.23 per cent to 8,723.05 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,630.92 points, closed at 28,294.28 points -- down 373.94 points or 1.30 per cent from the previous close at 28,668.22 points.
The Sensex touched a high of 28,630.92 points and a low of 28,272.03 points during intra-day trade.
The BSE market breadth was tilted in favour of the bears -- with 1,693 declines and 999 advances.
On Friday last week, both the key indices were suppressed by profit-booking, along with negative global cues and an outflow of foreign funds.
The barometer index had plunged by 104.91 points or 0.36 per cent, while the NSE Nifty slipped by 35.90 points or 0.40 per cent.
Initially on Monday, the benchmark indices opened in the red following negative Asian markets.
The domestic markets were also dragged lower by weak cues from the European and the US markets.
In addition, investors' risk-taking appetite was subdued as caution prevailed ahead of an upcoming meet of the Organization of the Petroleum Exporting Countries (OPEC) producers in Algeria to discuss oil production cuts.
Global markets also traded weak as investors' focus shifted from the central banks to the impending presidential elections in the US.
Besides, investors' sentiments were dented on the back of upcoming F&O expiry slated for Thursday.
Outflow of foreign funds and profit booking added to the downward trajectory.
However, the rupee appreciated by five paise to 66.61 against a US dollar from its previous close of 66.66 to a greenback.
"Volatility in global crude oil prices and negative Asian markets dragged the Indian equity markets lower at the start of the day's trade," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
"Lower European market accelerated the falls in the key domestic indices. Unwinding of positions ahead of F&O expiry also depressed the equity markets."
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with bearish sentiments on the back of global cues and profit booking.
"IT and banking stocks traded down on profit booking. Textile and aviation stocks faced profit booking at higher levels in the second half of the session," Desai said.
"FMCG stocks traded down on selling pressure. Cement and telecom stocks also traded lower on profit booking at higher levels."
In terms of investments, provisional data with the exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 206.40 crore, whereas the domestic institutional investors (DIIs) divested scrip worth Rs 113.35 crore.
Sector-wise, the S&P BSE automobile index plunged by 389.75 points, followed by the banking index which edged down 355.06 points, and the capital goods index receded by 203.55 points.
On the other hand, the S&P energy index edged up 10.32 points, the oil and gas index rose by 9.09 points, and the metal index gained 7.73 points.
Major Sensex gainers during Monday's trade were: Coal India, up 1.19 per cent at Rs 332.65; Reliance Industries, up 0.58 per cent at Rs 1,109.35; Lupin, up 0.42 per cent at Rs 1,495.05; Dr Reddy's Lab, up 0.33 per cent at Rs 3,191.45; and Tata Consultancy Services (TCS), up 0.15 per cent at Rs 2,400.85.
Major Sensex losers were: ONGC, down 3.84 per cent at Rs 250.50; Tata Motors, down 3.22 per cent at Rs 535.55; ICICI Bank, down 3.16 per cent at Rs 263.20; NTPC, down 2.96 per cent at Rs 152.25; and Gail, down 2.38 per cent at Rs 377.30.
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