The S&P CNX Nifty tumbled 135 points following across the board selling pressure led by Media, PSU Banks, Financial Service, Realty, Banks, Pharma, Energy, Infra, Metal, Auto and FMCG sectors.
Sentiments dampened mainly in reaction to the latest US Fed meeting minutes suggesting a rate hike in December and further worsened with decline in Asian counterparts, after China reported noticeable contraction in export figures.
In overseas markets, European stocks were trading lower while Asian stocks ended lower as an unexpected decline in Chinese exports stoked worries about the health of the global economy.
Meanwhile, minutes from the US Federal Reserve's September meeting raised expectations of a December interest rate hike and weak Chinese trade data for September 2016 weighed on investor sentiment.
The 50-share Nifty opened lower at 8,671.50 and drifted further to 8,541.35 before settling at 8,573.35, showing a sharp fall of 135.45 points or 1.56 per cent from its last close.
The Nifty had last ended at 8,575.30 on August 10, 2016. It hit a day's low of 8,541.35 in mid-afternoon trade, its lowest level in almost seven weeks.
It witnessed an intra-day movement of 140.20 points.
On sectoral front, Media dropped by 3.33 per cent, followed by PSU Bank (3.28 per cent), Financial Service (2.41 per cent), Realty (2.30 per cent), Bank (2.19 per cent), Metal (2.00 per cent), Private Bank (1.98 per cent), Infra (1.92 per cent), Energy (1.91 per cent), Pharma (1.81 per cent), Auto (1.28 per cent) and FMCG (1.00 per cent).
Notable Index laggards were Adani Ports (4.89 percent), Idea (4.76 per cent), Bank Of Baroda (4.75 per cent), Aurobindo Pharma (4.17 per cent), Tata Power (3.90 per cent), Hindalco (3.89 per cent) and Zee (3.50 per cent).
Gainers included ONGC (2.17 per cent), Infosys (2.17 per cent), Hero MotoCorp (0.34 per cent), Asian Paints (0.33 per cent) and Wipro (0.26 per cent).
A total of 1,290 scrips declined, 349 advanced while 57 remained unchanged. Total securities that hit their price bands were 108.
Turnover in cash segment fell to Rs 11,319.68 crore from Rs 15,091.93 crore as on Monday.
A total of 99,90,360 lakh shares changed hands in 23,62,224 trades.