The stock markets started Wednesday's trading session on a weak note with the BSE Sensex falling 214 points, amid a global selloff led by Italy's political crisis.
Declines in banking, auto and metal stocks dragged the indices lower.
National Stock Exchange (NSE) benchmark index shed 69 points to 10,564 in early deals.
Forty one stocks on the 50-scrip Nifty index were trading in the negative zone.
Top laggards on the index were Tata Motors, Hero MotoCorp, Vedanta and Hindalco Industries, trading around 1-2 per cent lower.Banking stocks extended their losses to a second day, with the Nifty Bank down 0.4 per cent in morning deals.ICICI Bank shares - which had shed over 3 per cent the previous day - were down 1.6 per cent.
State Bank of India was down 0.5 per cent.
Canara Bank and Axis Bank were trading around 1 per cent lower each.For the Nifty, Angel Broking chief analyst-technical and derivatives Sameet Chavan sees 10,720-10,740 as strong hurdles for the time being.
"As of now, we can expect index gyrating within a range of 10740 - 10600 for next couple of days, during which we are likely to witness stock specific moves in the market," according to Mr Chavan.Shares in state-run oil marketing companies Indian Oil, Bharat Petroleum and Hindustan Petroleum were trading 1.4 per cent, 1.8 per cent and 2.6 per cent lower respectively.
Indian Oil, the country's largest fuel retailer, lowered domestic petrol and diesel prices by a marginal 1 paisa per litre, after 16 days of consecutive hikes.In the global equity markets, investors fear that repeat elections in the euro zone's third-largest economy - which could come as soon as July - may become a de-facto referendum on Italian membership of the currency bloc and the country's role in the European Union.MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.5 per cent, while Japan's Nikkei average sold off as much 1.9 per cent to hit a six-week low.
Chinese shares also headed south, with the Shanghai Composite index down 1.8 per cent, South Korea's KOSPI and Australia's SP/ASX 200 slipped 2.0 per cent and 0.6 per cent, respectively.The sharp downturn followed from an equally harsh session on Wall Street on Tuesday, where the Dow Jones Industrial Average fell 1.6 per cent, the SP 500 lost 1.2 per cent and the Nasdaq Composite dropped 0.5 per cent.
The financial sector took a hard hit.Foreign portfolio investors (FPIs) had net sold shares worth Rs.
407.33 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs.
578.38 crore on Tuesday, according to provisional data from the NSE.TheSensex and Nifty had broken their three-day winning streak on Tuesday.
The BSE Sensex had closed 216 points lower at 34,949 while the Nifty settled at 10,633, down 55 points.(With agency inputs)