The 30-share Sensex ended down 224 points at 28,442 and the 50-share Nifty ended down 101 points at 8,606.
Shares of ING Vysya Bank and Kotak Mahindra Bank rallied by up to 6% on the BSE on reports that Kotak Mahindra Bank in final stages to buy the bank.
The company and its sister concern, Forever Precious, owe close to Rs 5,500 crore.
