In the domestic market, both the Nifty and Sensex opened the day with deep cut, down 1.5 per cent tracking a major sell-off in U.S. markets, which posted their biggest single day fall since the BREXIT vote. The 50-share NSE Nifty settled lower by 94.05 points, or 0.87 per cent, at 10,666.55 after shuttling between 10,586.80 and 10,702.75.
The leading U.S. stock market index on Monday closed down 4.6 per cent at 24,345.75, BBC reported.The fall surpasses a previous record 777.68 points drop on the Dow Jones during the financial crisis in 2008.
The broader NSE Nifty zoomed past the 10,200-mark for the first time to hit an all-time high of 10,242.95.
The BSE Sensex after scaling an all-time high of 32,687.32 points at the outset, finally ended 200.95 points to end at a new peak of 32,633.64, breaching its previous record of 32,575.17 hit on August 1 and also broke its intra-day record of 32,686.48 reached on August 2.
At 2:50pm, the BSE Sensex was trading at 34,350.14, down 407 points or 1.17%.
At 12:22 pm: BSE Sensex is still over 1,000 points down.
Melania Trump visits Cincinnati Children's Hospital in pictures
She also arrived at the State of the Union separately from Donald last week, breaking a longstanding tradition. But Monday's brief OH visit demonstrated that the first lady appears back to her usual stoic self.
The laggards include Tata Motors, Yes Bank, Axis Bank, SBI, Asian Paints, Tata Steel, Adani Ports, ICICI Bank, IndusInd Bank, HDFC Bank, Maruti Suzuki, L&T and Hero MotoCorp, plunged by up to 7.55 per cent. Tata Motors, Tata Consultancy Services and Kotak Mahindra were the biggest losers.
On Monday, the BSE Sensex was down by almost 310 points to a three-week low and the Nifty by 94 points at closing bell on heavy selling, mainly in banking, capital goods, and IT counters. Since the day Budget was announced on February 1, BSE's market capitalisation has dipped by Rs 5.6 lakh crore.
Agreeing with Roy, another fund manager from a private fund house said the fall in the market was "anticipated" but this is something which was long overdue and investors must utilize this fall to buy stocks which were expensive.
The spike in VIX comes amid global market rout, with Wall Street posting its biggest decline since 2011. It was down over 1,100 points during the morning session.
Elsewhere in Asia, Japan's Nikkei was down 5.4%, while China's Shanghai Composite Index shed 4.7%.