The Sensex ended the day lower by 74 points, while the Nifty lost 18 points in trade to end below the 7500 mark. Apart from the heavyweights that fell in trade other Nifty stocks that declined were Wipro, Tata Motors and TCS.
Shares in Essar Oil rallied five per cent after the company's board approved a delisting plan for the company. Among the Nifty stocks that saw the worst decline was ITC, which fell 6 per cent after reports that the Health Minister had written to the Finance Minister to hike taxes on cigarettes to prevent their use.
Metal stocks were in the limelight after the Chinese PMI data came in better than expected. Sesa Sterlite and Tata Steel both rallied in trade.
Shares in Gammon Infrastructure was locked at the upper end of the circuit filter after reports that the company has received approval from its shareholders to raise Rs 500 crore through a qualified institutional placement (QIP).
ONGC was up almost 5 per cent after reports that the company has inked an agreement with Turkish Petroleum firm TPAO for jointly bidding for oil assets in other countries.
Mid cap stocks that gained were Ashok Leyland, Aurobindo Pharma and Jubilant Foodworks. The Nifty Midcap 50 ended the day with gains in trade.
Meanwhile, most of the European markets were trading lower as worries over Iraq continued to push markets lower. The German DAX, the UK's FTSE and the French CAC were all trading with losses.