As news spread that Britain has opted out of the European Union (Brexit) in a historic referendum, key Indian indices dived deep into the red and were trading some 4 per cent down around 90 minutes into the opening bell.
The rupee was also ruling below the $68 mark.
Economic Affairs Secretary Shaktikanta Das sought to calm the markets.
"Government is prepared for all eventualities.
The stock market is down on initial spontaneous reaction, " he said.
The sensitive index (Sensex) of the BSE, which had closed on Thursday at 27, 002. 22 points, opened the next morning at 26, 367. 48 points.
Some 90 minutes into trading, when news emerged that Britain has exited the European Union, it drifted sharply and was ruling at 26, 034. 93, down 967. 29 points or 3. 58 per cent.
At one point, it had lost nearly 1, 050 points.
Among the 30 stocks that go into the Sensex basket, only Sun Pharma managed to stay afloat.
All the other stocks were in the red, led by Tata Motors, which was down as much as 11 per cent.
In the pre - open trades, the 30 - scrip index was down as much as 634. 74 - points or 2. 35 per cent.
An indication came from the SGX Nifty, which trades on the Singapore exchange and ahead of the opening bell in India, was down over 2. 75 per cent.
At the National Stock Exchange (NSE), where the 51 - scrip Nifty had closed at 8, 270. 45 points, the opening bell was at 8, 029. 10 points.
Thereafter, the index was ruling below the 8, 000 - points mark at 7, 962. 10 points, down 308. 35 points or 3. 73 percent.
The rupee dived over 1. 4 per cent to 68. 21 per dollar, while the British pound - - that had rallied to nearly $1. 5 in early trades - - fell sharply to its lowest level since 1985 at $1. 35.
But India's finance ministry said there was no cause for alarm.
"Rupee depreciation in line with other Asian currencies.
The government and the Reserve Bank of India have discussed all possible eventualities to deal with the situation, " Das said.
He also said India's macro economic situation and fundamentals remained strong, thanks to the control over strong current account deficit, fiscal deficit and revenue deficit, as also moderate inflation.
The government is also continuing with structural reforms, he added.
On Thursday, sensing that the chances of Britain remaining in the EU were higher, the investor mood had lifted the Sensex by 236. 57 points or 0. 88 per cent, while the wider 51 - scrip Nifty edged up by 66. 75 points or 0. 81 per cent.
This, despite foreign funds being net sellers of Indian equities on Thursday valued of Rs 31. 86 crore ($4. 72 million), as per data with the National National Securities Depository Limited.
For months, the global stocks, currency and commodity markets have been on the edge over how Britons will vote on whether or not to remain a member of the European Commission, which the nation had joined in 1973.
The global investor, though, has been in favour of continuity.