Indian shares fell over 1.5 per cent on Monday, falling for a seventh consecutive session, as exit polls showed BJP facing electoral defeat in Delhi, raising concerns that the government may not gain control in the Upper House of Parliament.
State elections have a bearing on seats for the upper house of parliament.
The Aam Aadmi Party is likely to win 38 seats in the 70-seat Delhi Assembly, according to the average of four opinion polls released on Saturday after the voting had ended.
"Delhi election result is something to look out for in the short term. However, investors are more anxious about the Budget," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.
Falls also tracked weak corporate earnings, lower Asian shares and caution ahead of gross domestic product data, due at 5:30 pm, for the first half of fiscal 2014/15 that will use a new method to recalculate growth.
The falls matched a seven-day losing streak in November 2013. Larsen and Toubro fell 6.6 per cent after its quarterly profit lagged estimates while it also reduced order book growth outlook.
"The fall in the past few sessions will bring valuations to a comfort zone and provide better opportunities," he said.
In other news, the Government today said it has launched prosecution of 60 people under the suspicion of stashing black money.
The 30-share index ended down 490 points or 1.71 per cent at 28,227.39. The gauge had lost 963.86 points in the previous six sessions.
In a similar fashion, the National Stock Exchange Nifty tanked 134.70 points or 1.56 per cent to 8,526.35.
Except for Bajaj Auto, Dr Reddy's, Sun Pharma, ONGC, Wipro and Infosys, all other Sensex constitutients were in the red. L&T, Tata Steel, Sesa Sterlite, GAIL and Cipla lost the most during the session with losses of up to 6.6 per cent.
All the sectoral indices, led by capital goods (-4.31%), metal (-2.54%), realty (-2.73%) and auto (-2.27%) ended in the negative zone.
Power stocks : Tata Power Co Ltd lost 2.44 per cent on fears that AAP may again lower power tariffs in Delhi like it did in its earlier stint. Reliance Infrastructure fell 2.8 per cent.
Metal stocks declined, tracking international prices after a surprisingly weak Chinese import data fuelled worries that economic growth may be more fragile than anticipated. Tata Steel Ltd fell 5.79 per cent, while JSW Steel lost 2.5 per cent.
A report by SMC Investments and Advisors said: "Asian stocks slid as China trade figures showed signs of weakness in the region's biggest economy. US stocks recovered last week amid hopes that the fall in oil prices might finally be over."
Besides, the depreciating rupee which slipped below the 62-mark against the dollar to trade above 62 and a mixed trend at other Asian markets on poor Chinese data, weighed on sentiments, they said.
European shares fell in early trading on Monday, tracking losses on Wall Street and in Asia, with disappointing Chinese trade data further raising concerns about the pace of economic growth in the world's second-biggest economy.
Asian shares wobbled on Monday after dismal Chinese trade figures fuelled concern over a slowdown in the world's second largest economy, while solid US jobs data were a mixed blessing as they raised chances of a US interest rates hike mid-year.
(With additional inputs from Agencies)