Banking, realty, metal and auto were the biggest losers in trade.
The markets recorded highest ever turnover of Rs 1.8 lakh crore along with the highest ever NSE F&O turnover of Rs 1.65 lakh crore.
The 30-share BSE Sensex shut shop at 16,289.82, down 490.64, and NSE Nifty closed at 4853.10, down 154.80
4: 16 PM
Sensex tanks 400 pts; all sectoral indices in red
Benchmarks continue to reel under heavy sell off in realty, metal, auto, banks, capital goods and pharma stocks.
While the Sensex shed over 400 points, all the BSE sectoral indices were in the red.
At 1:10 pm, the BSE Sensex was down 396.82 points or 2.36 per cent at 16383.64, and the Nifty down 133.25 points or 2.66 per cent at 4874.65.
BSE Midcap and Smallcap index were down 3 per cent and 3.54 per cent respectively.
ITC, Power Grid Corp, Suzlon Energy and Tata Power were only frontline Nifty gainers, while Mahindra and Mahindra, Tata Steel, DLF, Unitech and Tata Motors plunged 5 to 6 per cent.
Up by 2.7 to 7 per cent, Cadila Healthcare, Cummins, OnMobile Global, Torrent Pharma and GlaxoSmith Con were the top gainers on BSE Midcap.
Guj NRE Coke, Emami, Hind Oil Explor, Indiabulls Real and Kingfisher Airlines were the Midcap losers, down 7 to 8.5 per cent.
In the smallcap arena, Amtek India, Modern India, OCL Iron, Centrum Finance and Ahmednagar Forging gained 4 to 9 per cent while VST Tillers, Nirlon, Orbit Corporation, Mount Everest and Kewal Kiran slipped 9 to 10 per cent.
2: 31 PM
Nifty suffers sell-off; broader indices also dip
Sell-off in banking, realty, auto, technology and metal stocks forced Nifty to inch towards the 4900 mark and touch an intraday low of 4903.7.
At 11:48 am, BSE Sensex was at 16457, down 294 points, while NSe Nifty was trading at 4,912, down 95 points. The broader indices also followed the suit. The BSE Midcap was down 1.7 per cent and Smallcap slipped 2.1 per cent.
Despite the heavy sell-off, the only losers were ITC, Power Grid, Suzlon Energy and Tata Power.
Among the sectors, BSE Realty, Auto, Metal and Bank indices declined 3.3 to 3.8 per cent. Healthcare, IT, Capital Goods, TECk and Power indices dipped 1 to 2 per cent.
ICICI Bank down 4.25 per cent, SBI down 3.92 per cent, Axis Bank, Kotak Mahindra, PNB, HDFC Bank and Bank of Baroda down 1.5to 3.5 per cent were the losers in the banking space.
Indiabulls Real, DLF, HDIL and Unitech were the losers on realty space while Tata Steel, Hindalco, Sesa Goa, SAIL, Hindustan Zinc, Sterlite Industries, Jindal Saw, NALCO and Jindal Steel slipped in the metal segment.
In the auto segment, M&M tumbled 6 per cent to become the top loser. Tata Motors, Ashok Leyland and Hero Honda were down 4 to 4.6 per cent. Maruti Suzuki, Bharat Forge and Bajaj Auto declined 2 to 3 per cent.
12: 11 PM
Mkts open lower on weak Asian cues
After the Republic Day break, the Indian benchmarks opened lower on weak Asian cues. In the opening trade Nifty tested the 4950 only to immediately retrace.
On Tuesday, Jan 26, China closed at its lowest close in nearly three months after it implemented a previously ordered increase in reserve requirements for some banks.
While Asian markets as a whole is trading mixed, China was trading below 3,000 for the first time since Nov 2009.
At 9:02 am, NSE Nifty was trading at 4,958, down 49 points and BSE Sensex was at 16,626, down 155 points.
The CNX Midcap fell 38 points to 7,334 and the BSE Smallcap was down 24 points to 8,559.
ICICI Bank, HCL Tech, Maruti, SAIL, Jaiprakash Associates, Unitech, DLF (ahead of numbers), L&T and BHEL were the frontline losers in early trade.
After posting disappointing numbers, HUL, Hindalco, SBI and Sterlite Industries were down 1.5 to 2 per cent.
The only ones trading on the positive side were ITC, Reliance Communications, NTPC and Bharti Airtel.
In the midcap and smallcap space, Gujarat NRE Coke was up 1.3 per cent. Pantaloon rose 2.5 per cent and Cadila Healthcare gained 3 per cent.
The losers were RCF and National Fertiliser, Shree Renuka Sugar dipped 0.5 per cent, and TTML lost 2 per cent.
9: 58 AM