The Sensex dropped 115 points, while the Nifty fell 36 points in trade. All of the 30 Sensex stocks were in the red apart from ONGC and Sun Pharma.
Stocks that lost maximum ground in trade were Bhel, Dr Reddy's Labs, TCS, SBI and Reliance. Metal stocks were badly hit with Hindalco, Sterlite and Jindal Steel seeing maximum losses.
PSU banking stocks too saw heavy losses with Union Bank losing 2 per cent, Oriental Bank 1.67 per cent and State Bank of India 1 per cent. Other losers from the PSU banking space were Syndicate Bank, Bank of India, IDBI Bank, Bank of Baroda and Indian Overseas Bank.
Realty stocks also saw profit booking after rallying in the last few days. DLF which gained sharply on Wednesday shed 1 per cent, while Anant Raj Industries, Indiabulls Real Estate, Sobha Developers and Unitech Ltd were the other losers in trade.
Auto and ancillary stocks were also weak in trade today with Ashok Leyland, Mahindra and Mahindra and MRF among the losers.
Maruti and HeroMotor Corp also dropped after reports that workers in the Gurgaon region would be participating in the nationwide strike.
Shriram Transport Finance fell 4 per cent, after reports that US private equity firm TPG Capital is to sell part of its stake in Indian commercial vehicle financier.
Meanwhile, markets in Asia were trading lower led by sharp losses in the Hang Sang which dropped more than 1.75 per cent in trade. Indian markets are expected to remain volatile ahead of the Union Budget next week.