Benchmark indices dropped in trade despite relatively strong European cues, as investors remained worried over the earnings season, slated to kick-off next week.
Worries over how the monsoon season will pan out, also left investors worried. The Sensex ended the day lower by 215 points at 24,687 points, while the Nifty dropped 68 points in trade, on sustained selling pressure.
Bharat Heavy Electricals was the top gainer from the Nifty surging a huge 6 per cent in trade. Select pharma stocks like Lupin and Cipla also saw buying interest in trade.
Banking stocks came in for selling pressure for a third day in a row, with ICICI Bank, Federal Bank, IndusInd Bank and State Bank of India leading the declines.
Shares Diamond Power and Infrastructure surged after Kotak Mahindra Bank said that its arm had bought a 6.8 percent stake in the company.
The Mid-cap index which was up in trade in early morning saw declines on account of selling pressure in index stocks. Jindal Steel, Bank of India, L&T Finance Holdings and Sun TV were major losers from the space.
Meanwhile, markets in Europe, which had began the day higher, were trading in the red once again.