The key stock exchanges had a gap-down opening on Tuesday, with the BSE Sensex losing over 500 points after the surprise resignation of RBI Governor Urjit Patel on Monday.
Further, early trends of the Assembly election results in five states which showed a neck and neck fight between the Bharatiya Janata Party (BJP) and Congress in at least three also weighed on the sentiments.
The Sensex opened over 500 points lower. It was trading 517.97 points, or 1.48 per cent, down at 34,441.75.
In a similar movement, the NSE Nifty dropped below the 10,400 mark, slumping 144.05 points, or 1.37 per cent, to 10,344.40.
The Sensex tumbled 714 points, or 2 per cent, to close at 34,959.72 in Monday's session. The Nifty too fell 205.25 points, or 1.92 per cent, to end at 10,488.45.
"The markets are already in a downtrend. They have discounted a 3-0 whitewash. If even one state goes the BJP way, it will result in short-covering," said VK Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.
"As far as the RBI Governor's resignation is concerned, it alone has the ability to knock off 200 points from the Nifty," he pointed out.
"Vijay Mallya’s extradition order by UK court is positive for the markets, but will provide some cushion only later on when he actually lands in India," he added.
Elsewhere in Asia, Hong Kong's Hang Seng was flat, Japan's Nikkei dropped 0.56 per cent, while Shanghai Composite Index was up 0.28 per cent in early trade.
On Wall Street, The Dow Jones Industrial Average index rose 34.31 points, or 0.14 per cent, to 24,423.26 on Monday.
(With Agency Inputs)