Shares in heavyweight banking and finance stocks like HDFC and State Bank of India dragged the indices lower in trade after a sharp 800 point rally seen in the last two days.
The Sensex ended the day lower by 97 points, even as the Nifty fell 30 points as global cues remained weak. Check Sensex and Nifty gainers
PSU banking stocks took a pounding with stocks like Canara Bank, Allahabad Bank and Syndicate Bank seeing deep cuts.
Tata Motors and Bharat Heavy managed to stay resilient in a falling market. Shares in Suven Lifesciences jumped more than 8 per cent after the company secured product patent from countries like China, Mexico, Israel, China, Singapore and Sri Lanka.
Among the mid cap stocks Sun TV lost a huge 7 per cent in trade and at one stage fell almost 9 per cent.
JSW Energy and Concor were a few select midcaps that saw huge buying interest and ended the day sharply higher.
Meanwhile, markets in Europe were trading sharply lower, while most of Asia ended the day with losses.