Equity benchmarks failed to hold on to early gains and came under selling pressure in a choppy session on Wednesday, with the Sensex tanking 185 points amid mixed trends from global markets.
High crude oil prices and foreign fund outflows also played spoilsport.
The 30-share BSE Sensex declined 185.24 points or 0.33 per cent to settle at 55,381.17. During the day, it dived 474.98 points or 0.85 per cent to 55,091.43 after an initial rally.
The broader NSE Nifty dipped 61.80 points or 0.37 per cent to finish at 16,522.75.
From the Sensex pack, Nestle India, Tech Mahindra, Bajaj Finserv, Sun Pharma, Hindustan Unilever, PowerGrid, UltraTech Cement, HCL Technologies, Wipro, Infosys and Bajaj Finance were among the major laggards.
In contrast, M&M, HDFC, Kotak Mahindra Bank, HDFC Bank and Tata Steel were among the gainers.
Elsewhere in Asia, markets in Shanghai and Hong Kong ended lower, while Tokyo settled in the green.
Bourses in Europe were trading on a mixed note during the afternoon trade. Stock markets in the US had ended lower on Tuesday.
Meanwhile, international oil benchmark Brent crude jumped 1.49 per cent to USD 117.27 per barrel.
Foreign institutional investors offloaded shares worth a net ₹1,003.56 crore on Tuesday, as per stock exchange data.