In the Sensex kitty, ITC turned star performer by surging 2.45 per cent, followed by NTPC rising 2.19 per cent.
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.
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Top losers in the Sensex pack include Bharti Airtel, Infosys, Asian Paints, RIL, Coal India, HDFC Bank, HDFC, TCS, ONGC and M&M, falling up to 3.09 per cent.
At the close, the 50-share NSE Nifty was at 8,611.15, up 19.90 points, or 0.23 per cent, after moving between 8,637.15 and 8,555.20.
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.
This is its biggest single session fall since August 24, 2015, when it had lost 1,624.51 points.
Tracking gains in bluechip stocks, investors were also seen building up position in broader markets, lifting the small-cap and mid-cap indices by 0.83 and 0.15 per cent
Thus far in 2017-18, FIIs and MFs have invested Rs 198.91 billion and Rs 1,119.49 billion in the Indian equity markets. Of this, around Rs 152.46 billion has come in January alone.
Covering-up of short positions ahead of Thursday's expiry of August series in the derivatives segment gave equities a slight push
The fall was led by L&T, IndusInd Bank, PowerGrid, NTPC, TCS, ICICI Bank, Axis Bank, Hero MotoCorp, Bharti Airtel and SBI, declining up to 2.64 per cent.
The NSE Nifty also gained 53 points, or 0.49 per cent, to settle 10,855.15 after shuttling between 10,870.40 and 10,749.40.
The broader NSE Nifty index too finished lower by 4.80 points, or 0.05 per cent, at 10,632.20.
The broader NSE Nifty, after cracking below the key 10,300-mark, touched a low of 10,211.25, before finally ending 134.75 points, or 1.30 per cent, down at 10,226.55.
Reflecting the bearish mood, all sectoral indices, led by metal, teck and healthcare, ended in the negative zone.
Market experts believe the retreat is because of uncertainty.
The Nifty rose 176.50 points, or 1.74 per cent, during the week.
Investor wealth too fell by nearly Rs 7 lakh crore during 2015-16 or over Rs 2,700 crore per trading session.
China's malfunctioning stock markets remained semi-frozen.
Maruti Suzuki, Asian Paints, L&T, ONGC and Infosys have gained between 1%-1.5%.
Consequences of China's efforts to stabilise its equity markets after three weeks of declines, which wiped out some 30 per cent of the value is far more importance to the world, says Clyde Russell.
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.
Month-end dollar demand from importers resulted in the rupee touching a new all-time low on Wednesday against the dollar.
Markets ended lower on Tuesday, snapping a two-day winning streak, as investors turned cautious and booked profit in financials.
Coal India fell the most by 2.58 per cent among Sensex scrips, dragging the index into the negative zone.
The S&P BSE Sensex surged 217 points to end at 25,736.
Yes Bank was the top gainer in the Sensex pack, surging 3.76 per cent, followed by SBI at 3.18 per cent.
Broader market outperformed the benchmark indices with S&P BSE Midcap gaining over 1%
Nifty is likely to remain under selling pressure unless and until it breach the 7,700-7,720 levels on closing basis.
Sustained FII inflows and fresh spell of buying by domestic institutional investors fuelled the rally
The S&P BSE Midcap and the S&P BSE Smallcap indices under-performed to lose 0.8% and 1.6%
Profit-booking by participants in view of the domestic markets' recent record-setting run fuelled the downtrend
Covering-up of pending short positions on expiry of the July derivatives contracts and a strengthening rupee propped up the markets at high levels
Small- and mid-cap stocks continued facing selling pressure due to stretched valuations.
The S&P BSE Midcap and the S&P BSE Smallcap indices gained 0.3% and 0.5%, respectively
Among other stocks, IT firm Mphasis today reported a 15.30% increase in consolidated net profit at Rs 184.72 crore for the quarter ended September 30, 2015.
Tata Steel, SBI, Infosys and L&T were among the top gainers for the day.
Sun Pharma was the biggest gainer in the Sensex pack, advancing 1.79 per cent.
'After multiple days of losses, any relief rally is welcome. However, the trend hasn't changed.'
The wider NSE Nifty touched a low of 10,652.40 before finishing at 10,671.40, showing a loss of 97.75 points, or 0.91 per cent.
