At 2:30 pm, the Sensex traded 2,585.09 points - or 7.24 per cent - lower at 33,112.31 while the Nifty was down 783.90 points - or 7.50 per cent - at 9,674.50. The damage was widespread as all of the 11 sectoral indices were deep in the red at the time, with the Nifty Bank - a gauge of 12 major lenders in the country - down 8.74 per cent.

While all of the 50 stocks in the Nifty basket traded lower, nine of them were down with double-digit percentage losses. Worst hit were Bharat Petroleum, Yes Bank, ITC, Vedanta, SBI, Axis Bank and Hindalco, down between 10.74 per cent and 13.85 per cent.

HDFC Bank, Reliance industries, HDFC, ICICI Bank and ITC were the biggest drags on Sensex, together accounting for a fall of more than 1,250 points in the index.

Reliance Industries shares plunged as much as 9 per cent to hit Rs 1,049.50, after a nearly 4 per cent plunge in crude oil prices. On Monday, the biggest single-day fall in crude oil prices since the Gulf War had hurt investor confidence around the globe, leading to the steepest drop in Reliance Industries shares in at least 10 years. The RIL stock gained some ground the following day.

“The markets are already in a bear phase (20 per cent off peak). The Nifty is far away from the 200-day simple moving average (SMA) of 10,300 and will likely close below that level today,” AK Prabhakar, head of research at IDBI Capital, told NDTV. “The lockouts around the world are spooking the markets.”

Equities around the globe fell after the US President Donald Trump's announcement - suspending all travel from Europe except the UK for 30 days starting Friday - stunned investors, threatening more disruptions to businesses and the world economy. Mr Trump, however, said trade will not be affected by the restrictions.

Analysts said the United States' travel ban from Europe refuelled concerns about the impact of the coronavirus outbreak on world business. They had already been gauging the chances of major economies entering recession in the past few weeks due to the fast-spreading outbreak.

Equities in Asian markets slumped, with MSCI's broadest index of Asia-Pacific shares outside Japan losing 4.1 per cent to its lowest level since early 2019, and Japan's Nikkei dropping 5.3 per cent. Australia's benchmark dived 7.4 per cent while South Korea's KOSPI fell 4.6 per cent to a four-and-a-half-year low.

US and European equity futures also took a hit. The S&P 500 futures dropped 4.7 per cent, a day after the S&P 500 benchmark index lost 4.89 per cent, putting the index firmly in a bear market territory. Euro Stoxx 50 futures sank 5.8 per cent to their lowest levels since mid-2016.