The Nifty ended the day lower by 24.90 points, while the Sensex shed 112.45 points in trade.
Today's declines were led by a sharp fall in the oil and gas space with ONGC and Reliance contributing to the drop in the Sensex and Nifty.
A fall in heavyweight Hindustan Unilever and State Bank of India also led to a fall in the indices. Other notable Nifty losers were Ranbaxy, Gail, HDFC Bank, Tata Steel, Maruti Suzuki and Wipro.
Banking shares had a mixed day today with shares of Axis Bank surging following its QIP, while ICICI Bank also found buying support after the RBI monetary policy review.
PSU banking stocks, however, came in for severe selling pressure with prominent losers from the space including Bank of India, Andhra Bank, State Bank of India, Indian Overseas Bank, Oriental Bank of Commerce and Syndicate Bank.
Realty stocks were amongst the worst hit in trade today with HDIL plunging more than 6 per cent. Other prominent losers from the sector were Unitech, Indiabulls and Oberoi Realty.
Shriram EPC gained more than 2 per cent today after reports that the company got orders worth Rs 367 crore. Jet Airways on the other hand declined after reports of labour trouble at the company.
IT shares also came in for some selling pressure following gains in the rupee. Stocks that lost ground from the sector included Wipro, Infosys and Polaris Tech.
Meanwhile, markets in Europe were trading higher with the German DAX, the French CAC and UK's FTSE were trading with gains. Indian markets are now expected to move in tandem with global markets following the absence of any major domestic cues.