MUMBAI: The BSE benchmark Sensex ended 504 points or 1.29 per cent lower at 38,593.52 and the NSE Nifty 50 index dropped 148 points or 1.28 per cent to close at 11,440.20 on Wednesday.
The sharp decline in the trade was triggered by losses in banking and financial services shares as investors booked profits a day ahead of the expiry of futures and options contracts for the month of September.
Banking and financial services shares were among the worst hit in today's session with the country's largest lender - State Bank of India falling 7.7 per cent, its biggest single-day fall since August 24, 2015.
Indian equity markets mirrored losses in global markets as world stocks fell to a two-week low and risk assets dipped lower on Wednesday after US lawmakers called for an impeachment inquiry into President Donald Trump, increasing the prospects of prolonged political uncertainty.
Power Grid Corp (up 4 per cent) managed to hold gains to end as the top gainer at the 30-share index, while State Bank of India (SBI) (down nearly 8 per cent) settled as the top laggard. 23 of 30 constituents ended the day in the red.
On NSE, the broader Nifty50 ended at 11,440-mark, down 148 points. The index logged second biggest single-day fall this month.
All the sectoral indices, except IT, ended the day with losses.
Nifty PSU Bank index settled as the biggest loser, down over 6 per cent, followed by Nifty Auto index (down 4 per cent), and Nifty Realty index (down 3.5 per cent). Nifty IT index managed to settle 0.13 per cent higher.
In the broader market, the S&P BSE Mid-cap closed at 14,225 level, down 255 points or 1.76 per cent. The S&P BSE Small-cap, on the other hand, dipped 205 points, or 1.5 per cent, to settle at 13,383 level.