Markets continued its steep downfall and closed lower as weak monsoon forecast raised fears of a drought while delay in further rate cuts and slow pace of recovery in the economy dampened sentiment. The Sensex plunged 351 points to close at 26,837 and theNifty dropped 101 points to end at 8,135. In the broader market, BSE Midcap and Smallcap indices underperformed the larger peers and lost 1.2% and 1.8% each.