The Sensex ended the day lower by 191 points, while the Nifty ended the day lower by 69 points. ICICI Bank was the worst hit in trade today dropping more then 3.5 per cent, followed by other private sector banking names like Yes Bank and IndusInd Bank.
PSU banking stocks were also not spared with most of the bank from the space like Punjab National Bank, Canara Bank and Bank of Baroda losing heavy ground.
Among the few gainers from the Nifty in trade today were Tata Motors, Sun Pharma, Coal India and Dr Reddy's Labs.
Mid cap stocks also declined in trade today with notable losers being Voltas, Crompton Greaves, UPL and Hindustan Zinc.
Software stocks managed to hold firm in trade today with Infosys and HCL Tech ending the day flat, though Tata Consultancy declined in trade.
Rate sensitives like real estate fell after worries that there could be a rate hike by the RBI in its policy review on December 18.
Sobha Developers, IndiaBulls Realty and HDIL led declines. Bharti Airtel was string in a falling market after one of the brokerages upgraded the stock to outperform.
Meanwhile, markets in Asia mostly ended the day higher mainly discounting discounting worries over the Fed's QE3 taper programme.