Benchmark indices were trading sharply lower as global cues continued to remain weak. This is the sixth straight day that the indices are likely to end lower.
Weak overnight handover from Wall Street and tensions on the Korean peninsula saw stocks drifting lower.
South Korea's defense ministry said North Korea had killed a missing official from the South earlier this week. The Sensex was trading lower by 590 points, while the Nifty dropped sharply lower by 171 points at 10,958 points.
Among the top losers in trade were some of the banking names like ICICI Bank, State Bank of India, HDFC Bank and Kotak Mahindra Bank. Among the biggest losers from the Nifty were Zee Entertainment, Hindalco, Tata Motors and ONGC.
Tech Mahindra shares lost 2.6 per cent, even as the IT services major said its subsidiary has divested its stake in Altiostar Networks for $45 million (about Rs 331 crore) to Rakuten USA, Inc.
IT stocks, which had so far been resilient during the course of the week, lost ground with Infosys and TCS both among the early losers in trade.
Today is also the last day for the Sept F&O expiry which is likely to see heightened volatility during the course of the day.