After opening at 16,436.41, the 30-share Sensex hovered in a 200-point range before closing at 16,479.58, a loss of 66.60 points from its previous close. Out of the 30-share Sensex pack, 22 scrips declined.
Brokers said apart from poor show in European and Asian markets, the renewed signs of weakness in rupee was a major contributing factor for the fall in Indian stocks.
DLF that dropped by 4.18 per cent was the biggest loser amongst Sensex stocks, followed by SBI (3.64 pc), Mahindra and Mahindra (3.21 pc), NTPC (2.92 pc) and Jindal Steel (2.9 pc).
Counters like Reliance Industries, SBI, Infosys, HDFC and Mahindra and Mahindra that lost between 1-3.6 per cent contributed over 94 points to Sensex's loss.
The fall was cushioned to a great extent by ITC and TCS which gained 5.61 per cent and 2.13 per cent respectively.
Sell-off was seen in BSE-Realty, BSE-Metal, BSE-Banking, BSE-Power and BSE-PSU that lost in the range of 1.8-3 per cent.
The NSE 50-share Nifty also declined by 25.15 points or 0.50 per cent to finish at 4,974.80.
"Domestic markets started on a weak note following weak European cues. Uncertainty over the Greek crisis increased yesterday which pushed the global markets lower. Nifty continued to remain under pressure as European markets opened weak," said Fairwealth Securities Head Equity Sharmila Joshi.
Market participants said selling by foreign funds over the past two days have mainly weighed on the market sentiment. FIIs sold shares worth Rs 398.98 crore yesterday as per provisional data from the stock exchanges. They have taken out nearly Rs 1,030 crore between May 7 and May 8. (MORE)