The Sensex ended 255 points lower at 27,836 and Nifty declined 76 points to settle at 8,615.
Earlier in the day, the Sensex fell as much as 332 points and Nifty went below 8,600. Banking shares were among the worst hit in trades today, the Bank Nifty fell nearly 2 per cent or 351 points to settle at 19,484.
Metal, pharma, oil & gas, realty, power and auto indices also ended lower.
From the Nifty basket of shares, Axis Bank was the top loser, the stock fell 8.3 per cent to settle at Rs. 487.55 after the bank reported 83 per cent fall in net profit for the quarter ended September, after a sharp rise in bad loans, highlighting Indian banking sector's distressed loan burden.
