Markets recovered marginally from its low in late morning trades. The Sensex was down 206 points (1.2%) at 18,122 after touching a low of 18,039.
Nifty was down 58 points at 5,448.
Broader markets performed better than the benchmark. The BSE mid-cap index slipped 37 points to 6,830. BSE small-cap index was down 13 points at 8,464.
Asian markets mirrored gains in Wall Street. The Jakarta Composite was up nearly 1% at 3,438. Hang Seng and Nikkei were up marginally in trades.
All the sectoral indices were in red with FMCG and IT leading the downtrend. FMCG index slipped 2.6% to 3,277 while IT dropped 1.6% to 6,265.
Among the Sensex stocks, ITC slumped 4% to Rs 157. Tata Motors, Wipro, Jindal Steel and Tata Power shed 2-3% each.
Larsen & Toubro, BHEL, Jaiprakash Associates, were down.
Heavyweights - Infosys, ICICI Bank and Reliance were down around 1% each.
Among other stocks, SBI, Hero Honda, Bharti Airtel and TCS were in red.
However, HDFC continued to shine, and moved up 2% to Rs 642. DLF, Hindalco and ONGC gained marginally in trades.
PSU OMCs were in red. HPCL declined 3% to Rs 347. BPCL tumbled 4% to Rs 590. IOC was down 2% at Rs 329.
Airline stocks moved lower on news that oil firms have raised jet fuel prices. Jet Airways slipped 3.4% to Rs 537. Kingfisher Airlines tumbled 2% to Rs 50 while Spicejet plunged 7% to Rs 57.
BSE market breadth was negative. Out of 2,572 stocks traded, 1,346 declined while 1,120 advanced in trades.