Watch | Markets@Moneycontrol: Find out why the markets cracked today

Heavy selling pressure continued on the D-Street, with frontline indices breaching key milestones. The Sensex cracked over 440 points intraday, while Nifty breached 9,800-mark.

Markets crashed on the back of likely fiscal stimulus, which could increase the fiscal deficit.

The BSE Midcap index was down 1.6 percent and Smallcap declined 2.3 percent.

Experts expect the market to consolidate further with a negative bias in near term, at least till the announcement of July-September quarter earnings that will begin in second week of October.

"It is probably a part of bull market correction and in bull market correction, the market can fall 10-12 percent," Anish Damania, Head of Institutional Equities said in an interview to CNBC-TV18.

He still maintained his Nifty target for March 2018 at 9,825 level that it already achieved six months before target date.

He said the correction was warranted as the Nifty has seen one-way rally from 7,900 to 10,200 level despite earnings growth and business growth.

The fall was largely because of worries of likely increase in fiscal deficit, especially after expectations of fiscal stimulus.

Media reports indicated that the government could announce a stimulus package worth more than USD 7 billion, which may widen the fiscal deficit for the financial year ending March 2018 to 3.7 percent of GDP from a budgeted target of 3.2 percent.

“Stimulus can potentially increase the central government’s fiscal deficit to 3.5-3.7 percent of GDP in FY18, from the budgeted 3.2 percent target (3.5 percent of GDP achieved in FY17), depending on the size of the stimulus (0.3-0.5 percent of GDP),” Deutsche Bank said in a report.