Traders await inflation data which is due on Thursday, which will be vital data for final views on rate cut by the RBI in its Monetary Policy review.
The Sensex ended the day lower by 202 points, while the Nifty shed 62 points in trade today.
Among the shares that lost ground today Hindalco, ICICI Bank, Jindal Steel, Maruti and Bajaj Auto.
Among BSE sectoral indices only FMCG was seen in positive terrain.
Banking stocks were the worst hit in trade today, PSU banking stocks tanked with Union Bank dropping almost 3 per cent, while other stocks like Canara Bank, Punjab National Bank, Syndicate Bank, State Bank of India and Union Bank of India also lost ground.
Shares that gained in today's trade were Sun Pharma, ITC, Bharti Airtel, Asian Paints and HCL Tech.
Meanwhile, markets in Asia ended the day lower, while most of Europe was trading with losses, including the UK's FTSE, the German DAX and the French CAC.