The Sensex ended the day lower by 372 points (provisional), while the Nifty closed the day lower by 124 points. Among the worst hit in trade today were the banking and financial space with HDFC dropping 3.2 per cent, Axis Bank dropping 4 per cent, and IndusInd Bank also dropping 4 per cent.
PSU banking stocks followed their private sector peers lower with Union Bank, Bank of India and Canara Bank among the top losers in trade.
Other notable Nifty losers were NTPC, DLF and Ultratech Cement. Pharma stocks for a change also saw some selling pressure with Sun Pharma, Lupin and Cipla being closing lower.
IT stocks which had gained substantially in the last few months did not buck the trend. Notable losers from the space being Infosys, Tata Consultancy Services and HCL Tech.
Leading retail player, Future Retail also saw its share price dropping after the company was excluded from the F&O segment effective January 31.
Micro Finance player, SKS Micro Finance rallied after the RBI classified the company as NBFC-Micro Finance Institution ("NBFC-MFI") (non-deposit taking).
Wyeth and Pfizer which gained substantially on Wednesday continued to rally in trade after reports of their merger.
Real estate stocks did not have a particular good day in trade with DLF, Oberoi Realty and HDIL dropping sharply.
Meanwhile, markets in Asia ended the day lower following worries over the Fed's asset purchase programme. The Japanese Nikkei, however, bucked the trend as the Yen lost ground against the dollar. The Nikkei gained almost 2 per cent in trade.