Equity benchmark index Sensex tumbled 849 points to slip below the 80,000 level on Tuesday due to widespread selling pressure after the US issued a draft notice over the implementation of an additional 25 per cent tariff on Indian products.
Besides, persistent foreign fund outflows and a weak global trend also dampened investors' sentiment.
The 30-share BSE Sensex benchmark tumbled 849.37 points, or 1.04 per cent, to close at 80,786.54. During the day, the index nosedived 949.93 points, or 1.16 per cent, to hit a low of 80,685.98.
The 50-share NSE Nifty dropped 255.70 points, or 1.02 per cent, to finish at 24,712.05. In the intra-day session, it dived 278.15 points, or 1.11 per cent, to hit a low of 24,689.60.
Among Sensex shares, Sun Pharmaceutical, Tata Steel, Trent, Bajaj Finance, Mahindra & Mahindra, Bajaj Finserv, Reliance Industries, Axis Bank, Tech Mahindra, Adani Ports, Titan, BEL, and Larsen & Toubro were the major laggards.
However, Hindustan Unilever, Maruti Suzuki India, ITC, Tata Consultancy Services and UltraTech Cement were the gainers.
The US has issued a draft order implementing an additional 25 per cent tariff on Indian products, which President Donald Trump announced earlier this month, beginning August 27.
According to the draft notice released by the Department of Homeland Security, the additional tariffs will cover Indian products "that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am Eastern Daylight Time on August 27, 2025".
The notice explained that the higher levies were linked to "threats to the US by the government of the Russian Federation," with India targeted in line with that strategy.
In Asian markets, Hong Kong's Hang Seng, Japan's Nikkei 225 index, South Korea's Kospi and Shanghai's SSE Composite index closed in the negative territory.
The European markets were trading lower. US markets ended lower on Monday.
Global oil benchmark Brent crude declined 1.48 per cent to USD 67.78 a barrel.
Foreign Institutional Investors offloaded equities worth Rs 2,466.24 crore on Monday, according to the exchange data.
On Monday, the 30-share BSE Sensex climbed 329.06 points to settle at 81,635.91. The 50-share NSE Nifty rose 97.65 points to close at 24,967.75.