The Sensex ended the day lower by 135 points, while the Nifty closed lower by 39 points. Today's drop in the indices was despite strong equity markets across the globe. In fact, most of Asia closed with gains and European markets were all trading in the green.

Shares that dropped in trade included auto stocks like Tata Motors, Mahindra Mahindra and L&T. Shares of Maruti, however, surged following the launch of a cheaper and fuel-efficient version of its Alto, which has received robust orders according to the company. DLF came in for selling pressure once again following reports of transfer of IAS Officer for allegedly ordering a probe into the land deals of Robert Vadra-DLF.

The stock of Mahindra and Mahindra dropped after Credit Suisse downgraded the automaker to 'neutral' from 'outperform' and recommended investors switch to Maruti Suzuki.

Axis Bank surged almost 3%, following spectacular results reported on Monday, while Reliance which also reported results on the same day saw some selling pressure in the stock.

Shares of DB Realty were stuck at the upper end of the circuit filter for the third successive trading day. There were reports that renowned investor Rakesh Jhunjhunwala had picked a stake in the company.

Meanwhile, markets in Europe were trading higher on hopes that Spain would seek a bailout and Greece would be given time to settle its debt.

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