According to market observers, Thursday's fall was the largest ever on absolute points basis, when Sensex fell by 2,919.26 points or 8.18 per cent to 32,778.14 and Nifty50 declined by 868.25 points or 8.30 per cent to 9,590.15.

In the day's trade all stocks on Nifty50 and BSE Sensex ended in the red, along with all the sectoral indices hit their 52-week lows.

Sector-wise, PSU bank was the biggest loser, down 13 per cent while pharma, media and realty were down 10 per cent.

Moreover, India volatility index surged 30 per cent to 41, highest level at least since 2009. Even oil prices extended losses, with Brent crude at $34 per barrel, down 6 per cent.

Analysts have cited the relentless selling by FIIs since February 24 as the main reason for the colossal downfall.

Since February 24 or 13 trade sessions, the FIIs have pulled out funds worth Rs 35,675 crore.

"Today the Indian markets fell more than the other Asian markets. This could reflect higher selling by FPIs amidst huge volumes in the markets," said Deepak Jasani, Head of Retail Research, HDFC Securities.

"Relative valuation, FPI ownership and liquidity in the markets may have resulted in Indian markets underperforming other Asian markets today. Markets opened with a downgap, made one long attempt to recover from the lows but failed."

Furthermore, Jasani said that global recession risk is rising and the markets do not seem to be pricing that in fully.

"January was the third month in a row that the three-month measure of UK GDP showed zero growth, the weakest such run since the middle of 2009," Jasani said.

Meanwhile, Vinod Nair, Head of Research at Geojit Financial Services said: "Recession fears increased after WHO declared coronavirus a pandemic which forced investors to sell off risky assets. Fresh travel bans across nations is contributing to the fears that economic impact will be much larger than earlier estimates."

"RBI is expected to cut interest rate and announce additional liquidity before the scheduled meeting which is due next month".

According to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services: "Markets may not recover in a hurry and any bounce in the market could be sold into. In such times of global volatility, retail investors should keep calm and not panic."

"Long term investors with good quality stocks should hold on to their portfolios and see through the current storm. Even in the past we have seen many major economic issues impacting the market, however we have recovered from most of them over a period of time."

"Technically, Nifty has formed a big bearish candle on daily chart and RSI oscillator dug further into oversold territory. It has been making lower top - lower bottom from last four weeks and seen a correction of around 1,900 points in just five trading sessions. The immediate support for Nifty is now placed at 9,100 and then 8,970 levels; while major resistance is at 10,000 levels".

Additionally, the Indian rupee touched a 17-month low of 74.22 per US dollar.

"Strength of the Government to fight the virus will be crucial as FIIs have poured out huge money from the Indian markets as is evident from the equity market which faltered closed to (-) 9 per cent," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.

"Rupee can see weakness towards 75 if the virus effects keeps it grip."

In terms of international markets in Europe and US too bore the brunt of recessionary fears through the day.

European indices like FTSE, CAC and DAX index slipped over 6 per cent each, while the MSCI All-Country World Index fell as much as 2.3 per cent, the lowest intraday level since January 2019.

"The gauge is 20 per cent below its record closing high of Feb 12. The sell-off has wiped out over $11 trillion in the index's capitalisation," Khemka said.

"European equities followed Asian stocks lower as investors fled risk assets amid concerns about the cost to earnings and global growth from the spreading coronavirus."

"US futures once again tumbling by the most allowed and a gauge of world stocks on course to enter a bear market. US Futures declined 1,231 points or 5 per cent."

Ever since coronavirus has taken serious turn by spreading in almost all parts of the globe, global markets have remained volatile. According to analyst data, while markets in US and UK have lost almost 26 per cent of its value in last one month, index in emerging markets such as Brazil has fallen by about 27 per cent.

Markets in other parts of the globe such as Canada, South Africa, Australia, South Korea have all fallen consistently in the last several sessions. Surprisingly, the reduced number of new coronavirus cases in China seems to have lifted the spirits there with markets gaining marginally lately.