The S&P BSE Sensex and NSE Nifty 50 indexes cracked from higher levels in afternoon trading on the back of a broad-based selling pressure led by losses in banking, financial services and FMCG shares. The Sensex dropped as much as 860 points from the day's highest level and the Nifty 50 index fell below important psychological level of 9,250. Earlier in the day, the benchmarks staged a gap up opening on the back of strong global cues.
The Sensex closed 0.8 per cent or 262 points lower at 31,453.51 and the Nifty 50 index dropped 0.95 per cent or 88 points to settle at 9205.60.
"In the near term Nifty can go down to 8,900 levels," Pradip Hotchandani of Prudent Broking Services told NDTV.
All the 11 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty PSU Bank index's 3.3 per cent fall.
Nifty Financial Services, Bank, FMCG, Media, Metal, Pharma and Realty sector gauges also fell between 1-2.9 per cent.
Mid- and small-cap shares also faced selling pressure as the Nifty Midcap 100 index declined 0.7 per cent and Nifty Smallcap 100 index fell 1.3 per cent.
State Bank of India was top loser in the Nifty 50 basket of shares, the stock fell 4.2 per cent to close at Rs 171.40. Bajaj Finance, Britannia, Industries, Asian Paints, Tata Motors, Axis Bank, Kotak Mahindra Bank, Bajaj Finserv, Coal India, Dr Reddy's Labs, Cipla and Wipro were also among the losers.
On the flipside, Bharti Infratel rose 3.6 per cent to close at 170.35. Mahindra & Mahindra, power Grid, ONGC, Reliance Industries, Zee Entertainment and HCL Technologies were also among the gainers.
The overall market breadth was negative as 1,131 shares closed lower while 628 ended higher on the NSE.