Key benchmark indices shed their intra-day gains and ended the trading session on a weak note.
The bourses reacted to weak global cues and the Uttar Pradhesh election results which showed that the Congress-led UPA has failed to make any significant impact in the assembly elections of India's most populous State.
The BSE Sensex ended down 190 points at 17,173 and the Nifty ended at 5,222 down 58 points.
During the day, the Sensex touched a high of 17,692 and a low of 17,128.
Meanwhile, in Uttar Pradesh Mulayam Singh Yadav led Samajwadi Party is leading in 221 seats.
In Punjab, Shiromani Akalidal and BJP led coallition is likely to form the government again as the alliance is leading in 68 seats.
Uttarakhand is witnessing tough competetion.
Manipur is likely to see a congress government while in Goa BJP is ahead in 16 seats.
In Asia, Japan's Nikkei share average slipped for a second day on Tuesday as investors bagged profits on blue chip stocks following February's 10.5% rally, although some attractive valuations and a softer yen supported sentiment.
The benchmark Nikkei closed 0.6% lower at 9,638 after losing 0.8% on Monday.
Hong Kong's Hang Seng and China's Shanghai Composite indices ended lower by 1-2% each.
European shares fell in early deals as fresh concerns about economic growth in Europe and China, the world's biggest metals consumer, prompted investors to scale back their risk exposure.
At 1400 hours, the DAX was down 1.47% while France's CAC 40 was off 1.45% and London's FTSE 100 was lower by 0.98%.
Back home, on the sectoral front, BSE Metal, Capital Goods, Oil & Gas abd Bankex indices led the losses, down 1-4% each.
Metal shares were under pressure on the bourses after LMEX, a gauge of six metals traded on the London Metal Exchange slipped 1.37% on Monday, on concerns that slower growth target in China may curb demand from the world's biggest consumer of the industrial metals.
On the Bombay Stock Exchange (BSE), the Metal Index, the largest loser among the sectoral indices was down 450 points or 3.9%. JSW Steel, Hindalco Industries, Sterlite Industries and Tata Steel, down 5-6% each, were the notable losers from the pack.
BSE Bankex index was down 1% at 11,580.
On the other hand, BSE FMCG, Consumer Durables, and IT indices witnessed positive trades, having advanced 1% each.
On the Sensex, Hindalco Industries shed 6% at Rs 132 and was the top loser. Other prominent losers included Sterlite Industries, Tata Steel, Jindal Steel and Tata Power, down 4-5% each.
The gainers from the pack were DLF, ITC, Infosys, Maruti Suzuki and Coal India, up 1-3% each.
Among individual stocks, Jaypee Group companies -- Jaiprakash Associates and Jaiprakash Power Ventures slipped upto 1-4% each, extending their yesterday's over 5% fall, following the Samajwadi Party's lead in UP elections.
Sugar stocks witnessed profit booking during the trading session after the stocks had traded higher by 2-10%, each, in yesterday's trades on hopes of getting sugarcane arrears post assembly election results of UP.
The overall market breadth was negative as 1,773 stocks declined against 1,048 advancing ones, on the BSE.