The markets had a rough ride as unwinding of positions ahead of April derivatives expiry took a toll on key heavyweights.
The Sensex shaved off nearly 300 points from the highs registered at opening bell to end the day at 19,292, lower by 156 points and the Nifty ended at 5785, down 48 points.
The markets had opened on a firm note tracking strong regional peers.
Asia was in an upbeat mood after Wall Street cheered Ben Bernanke's statement that rates would remain unchanged.
But the optimism proved to be short-lived as rollover pressures in the derivatives segment dragged the indices into the red and jettisoned all attempts at a pullback, leading to a degree of choppiness in the later part of the day.
While the Asian markets ended in the green and European and European markets had a steady look about them, the markets back home stuck a discordant note for the second consecutive session.
On the macro-economic front, the food inflation went up marginally to 8.76% for the week ended April 16 from 8.74% in the previous week.
During the week under review, fruits became dearer by 28.43% year-on-year, while egg, meat and fish prices went up by 12.14% and onions became expensive by 10.96%.
Headline inflation has been above 8% since January 2010.
Whether this will have a bearing on policy making in the immediate future will be revealed by the credit policy announcement scheduled on May 3.
RCom tumbled by 5% at Rs 99 to top the losers list on the BSE on reports that the Enforcement Directorate had identified assets worth thousands of crores illegally made by companies involved in the 2G scam case
Among the other heavyweight losers, Hero Honda corrected by 3.2% at Rs 1685, Cipla weakened by 2.7% at Rs 309 and Reliance Industries fell 1.3% to Rs 972, extending Wednesday's losses, on reports that the government is considering imposing penalty on the company for falling short of targeted gas production at its D6 block.
Among other companies named in the ED reports, Unitech crashed by 7% at Rs 37 and DB Realty decline d3.8% at Rs 99.
On the other hand, ONGC strengthened by 1.9% at Rs 317 to emerge as the leading gainer on the BSE on reports that its oil and oil equivalent gas production rose 1.8% to 62.03 million tonnes in the year ended March 2011 over the year ended March 2010.
ICICI Bank rebounded from intra-day lows to end higher by 0.9% at Rs 1,117 after reporting a 17% rise in consolidated net profit at Rs 1,568 crore for the fourth quarter ended March 31, 2011.
And the shares of fertilizer companies were in limelight after the Cabinet approved the revision in nutrient-based subsidy rates of phosphatic and potassic fertilizers. National Fertilizers, Coromandel International, Rashtriya Chemicals and Fertilizers and Chambal Fertilizers gained in the range of 1-5% on the Bombay Stock Exchange.
The market breadth was negative. Out of 2991 stocks traded on the BSE, there were 1099 advancing stocks as against 1786 declines.