The market completely caught in bear trap after Budget 2019 proposed to increase surcharge on super-rich people and raise minimum public shareholding to 35 percent from 25 percent earlier.
The BSE Sensex fell 792.82 points or 2.01 percent to 38,720.57 and the Nifty50 plunged 247.20 points or 2.09 percent to 11,564. About three shares declined for every share rising on the BSE.
The broader markets also fell sharply as the Nifty Midcap and Smallcap indices dropped over 2 percent.
Bajaj Finserv was biggest loser among Nifty50 stocks, falling 10 percent followed by Bajaj Finance, ONGC, NTPC, Hero Motocorp, IOC, Indiabulls Housing Finance, Maruti, L&T, Grasim Industries and SBI which dropped 4-8 percent. However, Yes Bank and HCL Technologies bucked the trend.