The 30-share BSE index tanked 360.43 points to close at 33,370.76.
"Political disturbance in Saudi is triggering high volatility in the crude prices, which is negative for India leading to depreciation in INR," Vinod Nair, head of research, Geojit Financial Services.
"Additionally, continuous negative observations by USFDA on high-quality Indian pharma companies are leading to a downgrade for the sector," Nair added.
Among sectoral indices, the BSE healthcare index emerged as the worst performer, losing 3.51 per cent, followed by realty 2.24 per cent.
On BSE, 1,916 stocks declined, while 839 advanced and 116 remained unchanged.