The Sensex ended the day lower by 194 points (provisional), while the Nifty fell 55 points. Top losers from the Nifty in trade were Jaiprakash Associates, Bharat Heavy Electricals, ICICI Bank and Tata Motors.
Pharma stocks saw pressure and were among the top losers with Sun Pharma, Dr Reddy's and Cipla among the losers.
Jindal Steel and Power and ITC were the only stocks that showed some resilience in trade today. Tata Motors, which had rallied substantially on Friday, fell, despite reports hinting at the possibility of the company starting manufacturing in Saudi Arabia to cater to the growing market in the Middle Eastern region.
Bharat Heavy Electricals lost ground in trade ahead of the government's divestment in the company to LIC.
Banking stocks ended the day weaker led by losses in Punjab National Bank, Bank of Baroda, Union Bank of India, Kotak Mahindra and Axis Bank.
IT stocks, which have been hitting successive highs in the last few months, lost ground in trade and were the biggest losers. HCL Tech lost a huge four per cent in trade, while other losers were NIIT, Wipro and Tata Consultancy Services.
Mid cap stocks also had a bad day with stocks like Sun TV Networks, Apollo Tyres and India Cements among the major losers in trade.
Meanwhile, markets in Asia ended the day lower, while European markets were trading with sharp losses.
The German DAX was down more than two per cent, while the French CAC was trading lower by 1.3 per cent.