Among the Sensex losers, Yes Bank tumbled 5.46 per cent, followed by Bajaj Finance 5.40, ICICI Bank 3.82 per cent, IndusInd Bank 3.10 per cent and HeromotoCorp 2.55 per cent.
The NSE Nifty after shuttling between 10,397.60 and 10,279.35 points, ended 47 points, or 0.45 per cent lower at 10,301.05.
Markets extended gains for the fourth consecutive day tracking gains in banks, capital goods and oil and gas majors.
Coal India topped the losers' list in the Sensex pack on Tuesday, falling 2.36 per cent, followed by Bharti Airtel at 2.16 per cent.
This is the highest closing for both the indices since May 15.
Sentiments took a hit after broader Asian markets weakened, following a renewed sell-off on Wall Street on Tuesday as energy shares dropped after crude oil prices plunged to a 13-month low amid weak earnings and US-China trade disputes, fuelling worries about economic growth
The fall came on the back of a massive selloff in NBFCs, led by DHFL which skidded over 50 per cent on fears of a liquidity crisis.
Muted quarterly earnings, mixed cues from global markets and unabated foreign fund outflows added to the volatility
Next set of Q4 FY16 earnings, progress of monsoon along with election poll outcome will dictate market trend this week
Major gainers which contributed to the Nifty were ICICI Bank, State Bank of India, Reliance Industries, ONGC, Tata Consultancy Services, Infosys, Bajaj Auto, Tata Power and Larsen and Toubro.
Investors were anxious concerned about the uncertainties over the timing of Us Federal Reserve rate hike, US policies under President Donald Trump, the upcoming French election and rising crude price that could impact inflation, going ahead. A weak closing in Asia tracking overnight losses in the US owing to all these unknowns triggered selling, brokers said.
The top gainers on the Sensex were Cipla, Bharti Airtel, Maruti Suzuki, Hero Moto & Sesa Sterlite.
Yes Bank was the top gainer in the Sensex pack, surging 3.76 per cent, followed by SBI at 3.18 per cent.
The broader NSE Nifty too dived by 101.65 points, or 0.97 per cent, to close at 10,350.15.
ITC, Infosys, Wipro and HDFC Bank among the major losers.
The broader markets also ended lower in line with the benchmark indices
The breadth, indicating the overall health of the market, turned negative. On the BSE, 1,581 shares declined and 1,246 shares fell. A total of 165 shares were unchanged.
Nifty ends above 8,600; Tata Motors, RIL top leaders
Profit-booking by participants in view of the domestic markets' recent record-setting run fuelled the downtrend
Small- and mid-cap stocks continued facing selling pressure due to stretched valuations.
The 30-share Sensex ended down 208 points at 27,057 and the 50-share Nifty closed 59 points lower at 8,094.
The broader NSE Nifty dipped below the 10,200-mark to hit a low of 10,180.25 before ending at 10,195.15, down by 165 points, or 1.59 per cent.
Geo-political concerns over death of a Saudi journalist, Brexit and likely breach in Italy's budget also kept investors cautious.
The NSE Nifty settled the day 38.85 points or 0.37 per cent lower at 10,500.90 after shuttling between 10,590.55 and 10,456.65, intra-day.
Shares of IT companies were in focus with the Nifty IT and S&P BSE IT index gaining more than 2% in an otherwise lower market
The NSE Nifty too recovered over 100 points, or 0.96 per cent, to end at 10,576.85.
BSE Sensex on Monday closed nearly 34 points higher at 26,350.17 with gains in realty, power, FMCG and oil & gas stocks amid sustained buying by domestic institutional investors.
The S&P BSE Midcap and the S&P Smallcap indices rallied over 1% each
Sun Pharma was the biggest gainer in the Sensex pack, advancing 1.79 per cent.
The NSE Nifty cracked below the 10,800-mark to hit a low of 10,753.05 intra-day, before closing at 10,762.45 with a loss of 59.40 points, or 0.55 per cent.
Inflation in India probably edged up in October as food prices climbed while weak demand is expected to have hurt factory output growth.
The NSE Nifty, which dipped below the key 10,800-mark to touch a low of 10,755.40, bounced back on late buying to close at 10,817.70, up 9.65 points, or 0.09 per cent.
The 50-share NSE Nifty too closed down 168.30 points, or 1.58 per cent, at 10,498.25 -- a level last seen on January 3 when it closed at 10,443.20.
Capital goods, IT, auto and pharmaceuticals lead gains for the financial year
This is its biggest single session fall since August 24, 2015, when it had lost 1,624.51 points.
Hopes that better-than-forecasted monsoon may help the RBI cut rates sooner than expected, too triggered buying activity.
Investors booked profits in range-bound trade, led by PSU, oil & gas, energy, infrastructure, telecom, realty, healthcare, bankex, FMCG, capital goods and power counters.
The S&P BSE Midcap and the S&P BSE Smallcap indices slipped in red to shed over 1% each
The broader NSE Nifty too reclaimed the key 11,500-mark. It touched a high of 11,562.25, before finally settling at 11,536.90, showing a gain of 59.95 points, or 0.52 per cent.
The 50-stock NSE barometer Nifty finished 22.50 points, or 0.21 per cent, down at 10,526.20