Policemen were keeping a watch near lakes and canals on Monday - possible places where people in distress could head to kill themselves. They said rescue teams were on alert.
A police official in the western city of Ahmedabad, R K Patel, said: "A financial crisis can trigger suicides. We are just trying to prevent them. Till now, no such cases have been reported."
India's Bombay Stock Exchange, which had a market value of $657 billion last week after falling 10% in the previous two sessions, slid as much as another 10% in early trade on Monday.
The latest slump came after brokers sold the stocks they were holding as security for their clients.
'We are finished'
S S Gupta, a broker in Mumbai who said he had lost millions of rupees in two hours of trading on Monday morning, said: "Gold has turned into brass. We are finished."
Ahmedabad is considered particularly vulnerable to stock market volatility.
With more than five million retail investors, the city is one of India's main trading hubs where people have put in millions of dollars into shares.
Sanjay Joshi, a small investor, said: "I borrowed money to trade in the market. I lost it all in the past two days.
"I don't know how will I repay my loans."
In the 1990s, a stock market meltdown led to several bankrupt brokers and small investors committing suicide across India, some of them drowning in rivers or throwing themselves from skyscrapers.
Analysts described the market slide, which has been as much as 22.4% from an all-time high of 12,671.11 points on May 11, as a correction and said order should return soon.
Rajat Jain, a chief investment officer with Principal Asset Management Company, said: "It seems overdone and the market should stabilise during the second half of this week."