MUMBAI:  A benchmark index of Indian equities markets closed on trade more than 250 points down, as stocks like metal and capital goods plunged.

Investor sentiment was down after Friday's industrial activity data, measured in terms of the Index of Industrial Production (IIP) was below expectations. It only grew 0.5 percent in the month of July over the same month of the previous year.

India's retail inflation too slowed down marginally at 7.8 percent in August from 7.96 percent in the previous month.

There was also anxiety regarding global cues such as U.S. Fed rate hike and the upcoming China factory output.

However, India's annual rate of inflation, based on official wholesale price index, gave some relief to the market as it fell to a near-five-year low of 3.74 percent for August.

The annual inflation rate stood at 5.19 percent for the previous month and 6.99 percent for August of 2013. Notably, the annual inflation rate for food articles in August fell to 5.15 percent from 19.17 percent in the like month of the previous year.

Reacting to all the above, the 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,998.07 points, closed trade at 26,802.09 points (provisional), down 258.95 points or 0.96 percent from the previous day's close at 27,061.04 points.