The market erased all its gains to end lower in see-saw trade today, posting its fourth fall in five sessions due to widespread selling in auto, consumer, realty, oil and gas and banking stocks amid worries over weakening rupee and boiling crude oil prices.
While the Sensex closed 174 points or 0.51% lower to 34,299, the Nifty fell 47 points or 0.45% to 10,301.
Top Sensex losers were Tata Motors (13.40%), Asian Paint (3.95%) and Maruti (3.07%).
Adani Ports (4.52%), HDFC (2.59%) and Vedanta (2.44%) were the top Sensex gainers.
Market sentiments were further dampened on unabated foreign fund outflows and the International Monetary Fund (IMF) downgrading outlook for world economy to 3.7 growth on Tuesday.
The Indian currency collapsed to a new lifetime low of 74.27 in intra-day trade, raising concerns on the macroeconomic front.
A mixed trend at other Asian markets and a lower opening in the euro zone too triggered selling on the domestic bourses here.
"As long as the US Fed keeps hiking interest rates the impact of tighter dollar liquidity on Asian equities is unlikely to ease," HSBC analysts said in a report this month.
"We believe relief should come next year when it becomes clear that the US interest rate cycle is close to a peak," the note said.
The 30-share Sensex opened higher at 34,651.82 points but slipped into the negative zone to hit a low of 34,233.50 before concluding at 34,299.47.
Similarly, the NSE Nifty after shuttling between 10,397.60 and 10,279.35 points, ended lower at 10,301.
Selling was more pronounced in consumer durables, auto, oil and gas, FMCG, realty, PSU and banking stocks that dragged the indices into the negative zone.
Shares of oil marketing companies such as HPCL, BPCL and IOC were down up to 4.20 per cent as global crude oil prices again rose on reports of decline in crude export from Iran.
Sectorally, the BSE consumer durables index emerged as worst performer by falling 3.91 per cent, followed by auto at 2.62 per cent, oil and gas 1.92 per cent, FMCG 1.68 per cent, PSU 1.19 per cent, realty 1.06 per cent, power 0.62 per cent,
bankex 0.47 per cent, infrastructure 0.41 per cent and capital goods 0.25 per cent.
However, metal, healthcare, teck and IT indices managed to close in the positive zone by rising up to 1.01 per cent.
Market breadth was negative with 1024 stocks closing higher compared to 1591 ending lower on BSE.
Elsewhere in rest of Asia, Japan's NIkkei fell 1.32 per cent, Straight Time shed 0.49 per cent, while Shanghai rose 0.17 per cent.
In the euro zone, FTSE, CAC and DAX were little changed in their late morning deals.