The 30-share BSE benchmark ended 335.06 points or 0.88 per cent lower at 37,736.07; while the NSE Nifty tumbled 100.70 points or 0.90 per cent to 11,102.15.
IndusInd Bank was the top laggard in the Sensex pack, falling over 5 per cent, followed by HDFC, Axis Bank, PowerGrid, SBI, Bajaj Finserv and Bharti Airtel.
On the other hand, Sun Pharma, Maruti, Infosys and Reliance Industries were among the gainers.
Bourses in Shanghai, Hong Kong and Tokyo ended in the red, while Seoul settled on a positive note.
Stock exchanges in Europe were trading with losses in early deals.
Global oil benchmark Brent crude was trading 1.27 per cent lower at USD 43.53 per barrel.
In the forex market, the rupee fell 4 paise to close at 74.84 against the US dollar.