The Sensex provisionally closed (at 3.30 p.m.) at 34,195.94 points - down 561.22 points or 1.61 per cent - from its previous close at 34,757.16 points. The budget proposes to bring back a long-term capital gains tax or LTCG on equity investments, a tax on dividend distribution and also spending steps that will widen the fiscal deficit.
Overseas, European and Asian stocks tanked following a sharp sell-off on Wall Street.
In the morning trade, the Sensex fell over 1,200 points and Nifty50 dipping below 10,300 points, biggest falls in six-and-half years after the US wage data on Friday pointed to quickening inflation which may lead to higher rates by the US Federal Reserve.
Taiwan shares lost 5%, its biggest since in 2011 and Hong Kong's Hang Seng Index dropped 4.2%.
Bajaj Fin (+4%), Indiabulls HF (+1.5%), ICICI Bank (+1%), Eicher (+0.99%) and Tata Steel (+0.82%) were the top gainers on the NSE. As many as 13 per cent felt the fall could be steeper at 10 per cent.
In intraday trade, Sensex slumped almost 1,274.35 points to 33,482.81 points, while Nifty declined 371.40 points to 10,295.15.
It also added, "The President's tax cuts and regulatory reforms will further enhance the USA economy and continue to increase prosperity".
Indian stock markets were already under pressure after the government re-introduced LTCG-tax on equities in Budget-2018.
Commenting on the market crash, Finance and Revenue Secretary Hasmukh Adhia said that the domestic market was mimicking weakness in global markets and it can not be attributed to LTCG tax levied in the Budget. According to reports, Dow notched its biggest intraday decline in history with a almost 1,600-point drop while Wall Street erased its gains for the year, said Reuters.
BP reports one of its strongest quarters in years
The group benefitted from a rise in oil prices, with the price of a barrel of Brent crude having surged by 40 percent since July. Downstream earnings were very strong with underlying replacement cost profit of $7.0 billion, 24% higher than 2016.
Hot tea linked to esophageal cancer in smokers, drinkers
Researchers in China found a link between drinking scalding hot tea and esophageal cancer in people who smoke and drink alcohol. Even those who don't touch alcohol or cigarettes, but drink hot tea or coffee, could also be at risk, experts warned.
Kenya government allows 2 TV stations to resume broadcasting
Also on Monday, police teargassed demonstrators demanding the stations reopen as they tried to march on government offices. Isaac Okero, president of the Law Society of Kenya, told reporters: "Once again the state is wilfully violating Mr.
Tsunami Warning mistakenly sent to phones
AccuWeather , a private service based in State College, Pa., said it sent out the message because of a coding error by the NWS. Apparently the National Weather Service was testing a tsunami alert, but the word test didnt make it into the final message.