Our markets were gripped by an avalanche of selling pressure. With indices worldwide reeling from ratings downgrades on Greece and Portugal, we did not escape the onslaught either.
Long unwinding ahead of the derivatives expiry on Thursday added to the selling pressure.
The Sensex shaved off 310 points and the Nifty shed 92 points to end at 17380 and 5215 respectively.
And as if to give the index heavyweights company on the downside, the midcap index shed more than 1% at 7037 and smallcap space shed 2% at 9055.
The five-day winning streak had come to an abrupt end on the previous day and with today's losses, the markets have surrendered all the gains registered in the 5-day uninterrupted run that ended on Monday.
The US stocks had their biggest decline since February as a downgrade in the debt ratings of Greece and Portugal trigerred a flight to safety.
The Dow had lost 213 points and the Nasdaq had dropped 51 points overnight. The CBOE volatility index, which a key measure of market expectations concerning near-term volatility, shot up more than 30% to 22, its biggest one-day jump since October 2008.
And the Asian markets fared no better, with the Hang Seng and Nikkei slipping more than 2% each.
Earlier, Standard and Poor's had slashed Greek's debt to junk status on concerns about its ability to implement the reforms needed to address its high debt burden.
The rating agency also downgraded Portugal, citing concerns about the country's ability to deal with the high debt levels.
All the sectoral indices ended in the red. The high-beta realty index shed more than 3%. Jaiprakash Associates weakened by 4.4% at Rs 146 and DLF weakened by 3.1% at Rs 307.
Among the non-index realty stocks, Unitech and HDIL lost almost 4%, while Sobha Dvelopers shed about 3%.
Extending its poor run post the Q4 results, index heavyweight RIL gave up more than 4% to end at Rs 1017. Tata Steel, Tata Motors and ICICI Bank were the other significant losers.
As far as the broader markets were concerned, Indiabulls Real Estate, Whirlpool and Kesoram Industries were among the key losers in the midcap space and the smallcap space saw the likes of FCS Software, Vipul Ltd and McNally Bharat Engineering Company sliding more than 7% each.
Select stocks managed to buck the trend though. Sun Pharma strengthened by 1.5% at Rs 1621 , while SBI recovered from the day's low of Rs 2148 to end 0.8% higher at Rs 2235 and ACC added 0.5% at Rs 908.
The BSE market breadth was overwhelmingly in favour of the bears, with three declining stocks as against an advancing one.
RIL topped the value charts on the BSE with a total turnover of Rs 209.87 crore. This was followed by Hero Honda (Rs 116.49 crore), SBI (Rs 106.21 crore), Tata Steel (Rs 97.55 crore) and ICICI Bank (Rs 73.05 crore).
Jaiprakash Associates led the volume charts with trades of 2.08 million. It was followed by RIL (2.03 million), Tata Steel (1.54 million), DLF (1.36 million) and Reliance Communications (1.34 million).
