Equity benchmark Sensex dropped over 300 points on Friday tracking losses in index heavyweights HDFC Bank, ICICI Bank and Reliance Industries amid weak domestic investor sentiment.
According to market experts, investors fear that Finance Minister Nirmala Sitharaman's recent announcements on the Rs 20-lakh-crore economic package may not boost demand immediately, and hence economic revival would not take place any time soon.
After touching a low of 30,791.17, the 30-share index was trading 314.83 points or 1.01 per cent lower at 30,808.06 at 11 20 am.
Similarly, NSE Nifty slipped 34.45 points, or 0.38 per cent, to 9,108.30.
M&M was the top laggard in the Sensex pack, cracking over 3 per cent, followed by Maruti, HCL Tech, Hero MotoCorp, Axis Bank, ICICI Bank, ITC and HDFC Bank.
On the other hand, ONGC, Tata Steel, Bharti Airtel, Titan and HDFC were trading with gains.
In the previous session, the BSE barometer settled 885.72 points or 2.77 per cent lower at 31,122.89, while the broader Nifty tanked 240.80 points, or 2.57 per cent, to close at 9,142.75.
Foreign portfolio investors offloaded equities worth Rs 2,152.52 crore in the capital market on Thursday, provisional exchange data showed.
Besides, uncertainty over the effectiveness of the fiscal stimulus package, the spike in COVID-19 cases in the country weighed on investor sentiment, experts noted.
Sitharaman on Thursday announced a Rs 3.16-lakh-crore package comprising free foodgrains for migrant workers, Rs 2-lakh-crore concessional credit to farmers and working capital for street vendors in a bid to help those hit hard by the nationwide lockdown.
Meanwhile, the number of COVID-19 cases in India climbed to 81,970, while the death toll rose to 2,649, according to the health ministry.
Globally, the number of cases linked to the disease has crossed 44.43 lakh and the death toll has topped 3.02 lakh.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading marginally higher.
On Wall Street, stock exchanges settled on a positive note in overnight trade.
International oil benchmark Brent crude futures were trading 1.47 per cent higher at USD 31.59 per barrel.