Market benchmark BSE Sensex tumbled over 245 points to trade at 40,810 in openings deals on Tuesday on hectic selling by investors across sectors amid growing concerns over the economic impact of coronavirus epidemic.
The NSE gauge Nifty fell about 75 points to trade at 11,971 in early trade.
Analysts said worries persist over rising death toll and the economic fallout from the novel coronavirus.
The death toll from China's coronavirus epidemic climbed to 1,868 on Tuesday as 98 more people died while the total number of confirmed cases jumped to 72,436.
On Monday, the Sensex closed with losses of 202.05 points, or 0.49 per cent, at 41,055.69. While, the Nifty settled lower by 67.75 points or 0.56 per cent at 12,045.80.
Asian shares were also trading on a subdued note on Tuesday.
Meanwhile, the rupee opened 11 paise lower at 71.42 against the US dollar in opening trade on Tuesday.
Foreign institutional investors had sold equities worth Rs 374.06 crore on a net basis on Monday, according to provisional exchange data.