Benchmark indices fell heavily, as heavyweights led by HDFC, Infosys Technologies and HDFC Bank pulled the indices lower.
The Sensex was last seen trading lower by 480 points, while the Nifty was trading lower by 142 points, at 10,975 points. The Sensex also moved below the 37,000 points for the first time since March, 2019.
The US Federal Reserve, which announced its policy decision yesterday, did not hint at any agressive rate hikes, whic pushed global markets lower.
Shares of Maruti moved between gains and losses after the nation's largest carmaker sold 1.09 lakh units in July, a fall of 33.5 percent from the year ago period.
Shares in Bajaj Auto too fell sharply, after sales declined for the first time in two years. Most auto numbers are going to look weak, which could impact retail loan book of banks as well, as growth slows down considerably.
Pharma sector stocks were also looking weak with Cipla, Sun Pharma and Dr Reddy's being among the top losers in trade.
Shares in Zee Entertainment lost ground despite the promoters agreeing to sell an 11 per cent stake in Zee Entertainment Enterprises Ltd (ZEEL) for Rs 4,224 crore to Invesco Oppenheimer Developing Markets Fund. The shares were down a staggering 6 per cent in trade.
Meanwhile, most Asian markets were trading lower, despite a cut by the Federal Reserve. The Japanese Nikkei, the Hong Kong's Hang Sang and the Korean Kospi were all lower in trade.