The broader indices were under performing the benchmark indices, slipped over 1.7 pc.
The sell-off in realty, capital goods, banking, power, auto and metal stocks pushed the Nifty below the 5,000 mark.
The 30-share BSE Sensex touched an intraday low of 16,721.26, before closing at 16,789.74, down 219.43 points or 1.29 pc.
The 50-share NSE Nifty was down 75 points or 1.48 pc, to settle at 4988.60; it touched a day's low of 4968.45.
However, Bharti Airtel, ITC, HUL, Cairn, Reliance Communication, M&M and HCL Tech bucked the trend and capped the losses to some extent.
Sensex below 17k mark; SBI, DLF dip
At 01:13 pm, the Sensex remained below the 17,000 mark. Financial, capital goods, cement, realty, power, select auto and steel stocks along with Reliance Industries slipped in the red.
The Sensex was down 85 points to 16,923 and the Nifty fell 31 points to 5,032. The market breadth was slightly weak.
However, buying in few stocks like Bharti, Infosys, HUL, ITC, Jindal Steel, Reliance Communication, HCL Tech and M&M capped the losses.
About 1-1.5 pc fall in European markets also weighed on the benchmark indices.
In largecaps, Reliance Industries, SBI, ICICI Bank, DLF, NTPC, SAIL, BHEL, Maruti, Power Grid, Unitech and Grasim declined 1-3.5 pc.
Nifty volatile; RIL, SAIL , ING Vysya dip
At 10:55 am, the Nifty was trading marginally lower with some volatility and was hovering around the 5,050 level.
The Nifty was down 19 points at 5,044 and the Sensex fell 47 points to 16,962.
However, selling continued in realty, capital goods, select auto, power and banking stocks.
Jindal Steel, Sterlite Industries, ONGC and Cairn were the other gainers.
Reliance Industries, Jaiprakash Associates and SAIL were the other losers.
In the midcap space, AstraZeneca, KEC International, Balrampur Chini and HCL Info jumped 3.5-9 pc while Piramal Health, KGN Industries, EIH, P&G and ING Vysya Bank fell 2.5-5 pc.
Sensex open weak; BPCL, ICICI, SBI dip
The Sensex opened the session on a weak note and was trading below the 17,000 mark.
At 9:56 am, the Nifty was down 29 points at 5,033 and the Sensex fell 79 points to 16,930. Weak Asian and US cues weighed on the markets in the early trade.
However, Banking, oil marketing, capital goods, select power stocks and Reliance Industries were witnessing selling pressure while technology, telecom and FMCG stocks were the gainers.
Among the others, BPCL, ICICI Bank, SBI and L&T were weak. However, Cairn, TCS, M&M, IDFC, Wipro, Infosys, ONGC and Bharti Airtel were the gainers.