Benchmark indices gave up gains witnessed in the last two days, as heavy selling in the stock of Infosys, pushed indices lower.
The Sensex closed the day with losses of 381 points, while the Nifty closed lower by 105 points. Leading the set of losers was Infosys, after the company warned that margins for the next quarter could be hit.
Banking stocks also did not lend any support with heavyweight ICICI Bank, State Bank of India, PNB and Bank of Baroda seeing cuts between 1-2 per cent.
Metal stocks also saw some heavy selling pressure with Hindalco, Vedanta and Tata Steel among the big losers in trade. Select stocks like NTPC and GAIL were the only few gainers from the Nifty stocks. Midcap stocks also saw heavy selling pressure with IFCI and Hindustan Zinc among the losers.
Eros International Media, which has seen sustained selling pressure in the last few days, was locked at the upper end of the circuit filter.
Airline companies shares took a good drubbing after the Competition Commission of India levied a fine on many of the companies. Jet Airways and SpiceJet both ended lower, while InterGlobe Aviation ended the day with gains.
Meanwhile, markets across Asia were trading with losses, as security concerns continued to weigh on markets there. The German DAX, French CAC and the UK's FTSE were trading with losses of half a per cent.