The benchmark indices extended their losses in mid-morning trade. At 10:58 am, the Sensex was down 661 points or 1.32 per cent at 49,389. The Nifty dropped 201 points or 1.36 per cent to 14,612.
The top gainers on the Sensex were Asian Paints, Sun Pharma, Power Grid, Hindustan Unilever, Dr Reddy's and NTPC. The laggards were ONGC, SBI, ICICI Bank, Axis Bank and Kotak Bank.
According to an agency report, the Sensex dropped in early trade, tracking losses in index majors Reliance Industries, ICICI Bank and Infosys amid a negative trend in global markets.
In the previous session, Sensex ended 280.15 points or 0.56 per cent higher at 50,051.44, and Nifty advanced 78.35 points or 0.53 per cent to 14,814.75.
Foreign institutional investors (FIIs) were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 108.24 crore, as per exchange data.
"The sudden surge in COVID-19 cases globally is a cause for concern. Markets had discounted a sharp recovery in global GDP growth in 2021. But now, with parts of Germany, France and Italy going through the third wave and regional lockdowns, global GDP growth is likely to be below estimates," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The recent crash in crude is a reflection of reduced demand emanating from declining economic activity, he said, adding that in India, the second wave in some prominent cities is adding to the concern.(with inputs from PTI)