Equity benchmark BSE Sensex tumbled 260 points on Friday, dragged by losses in banking and financial stocks as RBI's rate cut and other measures to prop the economy did not meet market expectations.
After falling over 450 points during the day, the 30-share index ended 260.31 points or 0.84 per cent lower at 30,672.59.
The broader NSE Nifty too settled 67 points or 0.74 per cent down at 9,039.25.
Axis Bank was the highest laggard within the Sensex pack, plunging quite 5 per cent, followed by HDFC, Bajaj Finance, ICICI Bank, Tata Steel, Bajaj Auto, HDFC Bank and IndusInd Bank.
On the opposite hand, M&M, Infosys, Asian Paints, UltraTech Cement and Tech Mahindra were among the gainers.
Earlier within the day, the Federal Reserve Bank of India (RBI) unexpectedly slashed benchmark interest rates to their lowest levels since 2000 during a effort the revive the economy.
The repo rate was cut by 40 basis points to 4 per cent and therefore the reverse repo rate was decreased to three .35 per cent from 3.75 per cent.
The financial institution also extended the three-month moratorium on loan repayments till August 31 and raised the limit on banks' group exposure to companies.
"However, RBI has not announced any relief on the restructuring of loans to deal with the danger of rising asset quality issues within the banking sector which has come as a disappointment for the equity markets," said Gaurav Dua, Sr VP, Head Capital Market Strategy & Investments, Sharekhan by BNP Paribas.
Along with adverse impact of COVID-19 pandemic, the extra concerns associated with US-China brinkmanship is creating uncertainties and accordingly, equities are expected to stay volatile with negative bias within the immediate term, he added.
India witnessed the most important single-day spike with 6,088 COVID-19 cases, taking the tally to 1.18 lakh. The price rose to three ,583, consistent with the health ministry.
Globally, the amount of cases linked to the disease has crossed 51 lakh and therefore the price has topped 3.32 lakh.
Hong Kong led a sell-off across Asian equities after China introduced proposals to enact a national security law for the town .
Bourses in Shanghai, Tokyo and Seoul ended significantly lower.
Stock exchanges in Europe were trading on a negative note in early deals.
International oil benchmark Brent crude futures slipped 4.38 per cent to USD 34.48 per barrel.
On the currency front, the rupee depreciated 34 paise to provisionally close at 75.95 against the US dollar.