The 30-share BSE index fell 710 points or 1.35 per cent to close at 51,823, while the broader NSE Nifty settled 225 points or 1.44 per cent lower at 15,413.
Tata Steel was the biggest loser in sensex pack falling as much as 5.24 per cent followed by Wipro, Reliance, IndusInd Bank and HCL Tech.
TCS, HUL, Power Grid and Maruti were the only gainers rising up to 0.31 per cent.
On the NSE platform, all sub-indices finished in red with Nifty Metal, Media, Realty and Oil & Gas falling up to 4.87 per cent.
In addition, unabated foreign fund outflows also played spoilsport for the bourses.
“Pull back rallies can be sharp and it was sharp yesterday. The important question is — will this continue? There is no economic news, except the softness in crude, to sustain the rally.
“There is no reason for FIIs to change their selling strategy since the dollar continues to be strong and US bond yields are attractive and expected to rise further,” V K Vijayakumar, chief investment strategist at Geojit Financial Services told PTI.
Meanwhile, rupee declined by 27 paise to a record low of 78.40 (provisional) against the US dollar on Wednesday due to unabated foreign fund outflows and losses in the domestic equities.
(With inputs from agencies)