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Benchmark indices fell around 1.5 per cent on Monday, registering its second consecutive day fall on dampened sentiments ahead of US Fed's annual Jackson Hole annual symposium and rising dollar index, dealers said.

At close, the Sensex ended 872.28 points, or 1.48 per cent, down at 58,773.87, and Nifty ended down 267.75 points or 1.51 per cent at 17,490.70.

BSE IT fell 1.65 per cent, BSE Auto fell 1.92 per cent, BSE Metal fell 2.69 per cent, and BSE Cons Durables fell 1.57 per cent. These sectors are worst hit and seen heavy sell-off in the market.

Tata Steel, Asian Paints, Larsen & Toubro, Wipro, and Ultratech Cement were among the worst performing stocks on the BSE.

BSE MidCap fell 1.80 per cent, and BSE SmallCap and BSE LargeCap fell 1.17 per cent and 1.53 per cent, respectively.

"While correction was overdue for sometime after the recent upsurge, fresh concerns of a likely hawkish stance by the US Fed in its September meet and strengthening dollar index turned investors jittery and triggered a massive fall in banking, IT, metal & realty stocks," said Shrikant Chouhan, Head of Equity Research, Retail, Kotak Securities Ltd.

The fall in the market has emerged after Federal Reserve's commitment to tighten monetary policy triggered fears of aggressive rate hike across global markets.

Investors and traders are eyeing Federal Reserve's Chair Jerome Powell's speech at Jackson Hole later this week.

Meanwhile, the dollar index has climbed to five-week-high due to expectations of Fed to stick to its hawkish stance to tame inflation.

Currently, the dollar Index was 108.32 by the closing of Indian market hours.

Global stocks also declined as investors looked ahead Jackson Hole. European shares also had the worst day on Monday as worries about tightening gas supplies from Russia, hawkish signals from the European Central Bank, and weak economic outlook weighed on investors' minds.

The Shanghai Composite Index added 0.6 per cent but Hong Kong's Hang Seng Index ended 0.6 per cent lower.

"The euro slumped back to parity with the US dollar as surging energy prices heightened fears that region's big economies would slide into a recession," said Deepak Jasani, Head of Retail Research, HDFC Securities.

Domestically, analyst believe sentiments of investors to remain volatile in coming sessions as focus would shift back to global concerns of falling crude oil prices amid weakening demand, and US-China tussle over Taiwan.

"Technically, a sharp intraday sell off and bearish candle on daily charts is indicating a continuation of weakness in the near future. However, a quick pullback rally is likely if the index trades above its key resistance level of 17575. Below the same, the correction wave will continue till 17400-17350," Chouhan added.