Benchmark indices ended the day sharply lower, led by a fall in banking stocks, after inflation data came in higher than expected.
Worries that the Reserve Bank of India would not cut interest rates, following the inflation data, saw investors selling heavily into banking stocks. The Sensex ended teh lower by 300 points, while the Nifty dropped 85 points in trade.
Maharashtra Bank also fell 3 per cent, after its results disappointed the street. Karnataka Bank was the only bank, which managed to stay resilient in a falling market.
Metal stocks were the hardest hit in trade today, with Hindalco and Vedanta the biggest losers,
Tata Motors and Vedanta were the only stocks that managed to gain ground in trade from the Nifty.
Shares in Nestle jumped 7 per cent, after its results largely beat expectations. Dr Reddy's was down after reports that the company would spend Rs 136 crores in Q4 on remediation of plants under Nov warning letter.
Meanwhile, markets across Europe were trading with losses, while most of Asia ended lower.
The German DAX, French CAC and the UK's FTSE were down almost half a per cent each.