The Sensex ended the day with losses of 272 points (provisional), while the Nifty ended the day with losses of 82 points, at 6001 points.
Stocks of ONGC, Bharat Heavy and Coal India contributed to losses in the Sensex and the Nifty, as investors heavily sold government owned entities. But, the top loser from the Nifty stocks was Cipla, which fell more than six per cent, after its profits for Q3 2013 dropped sharply.
Sun Pharma, however, rallied in traded and ended with gains after its results pleased the market. HDFC Bank also joined the list of losers after reports hinted at the possibility of the company being dropped from the MSCI Index. Parent company, HDFC, also fell in trade.
Banking stocks were badly hit with PSU banking stocks coming in for a severe bout of selling pressure. Investors remained worried that despite WPI inflation falling, core inflation remain stagnant. PSU banking stocks in particular came in for severe selling pressure with Bank of Baroda, Bank of India, Syndicate Bank and Oriental Bank of Commerce leading the fall.
Mid cap stocks also ended the day sharply lower in line with index stocks. HPCL, Voltas, Jain Irrigation, Crompton Greaves and Divis Labs were among the losers.
Shares in India Bulls Real Estate fell to a new 52-week low of Rs 47.05 on the National Stock Exchange.
Meanwhile, Japanese stocks dropped 2 per cent in trade, as Asian markets saw some selling pressure ahead of key data from the United States. Other markets from Asian that declined were the Shanghai Composite and the Hong Kong's Hang Sang.