The NSE Nifty slumped 218.85 points or 0.87 per cent to end at 24,795.75.
From the 30 Sensex firms, Adani Ports & Special Economic Zones, NTPC, State Bank of India, PowerGrid, IndusInd Bank, Axis Bank, HDFC Bank, Titan and UltraTech Cement were the major laggards.
Mahindra & Mahindra, ITC, Bharti Airtel, Infosys, Bajaj Finance, Tata Consultancy Services and Tech Mahindra defied the trend.
"The Indian markets have entered a consolidation phase with high risk of underperforming to Asian peers.
"This phase is marked by significant corrections in the broader market due to premium valuations. There is notable global arbitrage activity, with Chinese markets attracting substantial inflows driven by its attractive valuations and stimulus measures," Vinod Nair, Head of Research at
Global oil benchmark Brent crude surged 2.09 per cent to USD 79.68 a barrel.
European markets were trading on a mixed note on Monday.
In Asian markets, Tokyo, Shanghai, Hong Kong and Seoul settled higher.
Wall Street ended with gains on Friday.
Investors are reassessing their portfolio positions and FIIs outflows are exacerbated. Amid escalating
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 9,896.95 crore on Friday, while Domestic Institutional Investors (DIIs) bought equities worth Rs 8,905.08 crore, according to exchange data.
On Friday, the BSE Sensex tumbled 808.65 points to settle at a three-week low of 81,688.45, while NSE Nifty slumped 235.50 points to 25,014.60.
Last week, the BSE Sensex tanked 3,883.4 points, or 4.53 per cent, and the Nifty slumped 1,164.35 points or 4.44 per cent.