Weaker then expected HSBC's China flash purchasing manager's index (PMI) also weighed on sentiments across the Asian region.
The Sensex was trading lower by 170 points, while the Nifty dipped 47 points in trade. Among the notable losers from the Nifty were those from the financial sector. Stocks that lost ground were HDFC, Punjab National Bank, HDFC Bank and IDFC.
ICICI Bank which had rallied substantially during the early part of the week continued to lose ground. The stock lost 1 per cent in trade today.
Apart from banking stocks, shares from the metals pack fell lower after lower then expected data PMI data from China. Tata Steel, Jindal Steel and Sesa Sterlite were the early losers in trade.
Software stocks were having a good session in trade with Tata Consultancy Services, Wipro and HCL Tech among the gainers.
Wyeth which had gained as much as 20 per cent in trade on Wednesday jumped another 10 per cent taking total gains to 30 per cent in two days.
Nifty gainers in trade today were Coal India, Cipla, Dr Reddy's and Ranbaxy Laboratories. The mid cap index was trading flat with select stocks keeping the index from sliding. Hexaware, MRF, Sun TV Network and Tata Global were the early gainers.
Markets in Asia were trading mostly lower after the Fed Minutes were revealed. Only the Japanese Nikkei rallied after the Yen fell against the dollar.