The fall was led by L&T, IndusInd Bank, PowerGrid, NTPC, TCS, ICICI Bank, Axis Bank, Hero MotoCorp, Bharti Airtel and SBI, declining up to 2.64 per cent.

Going ahead, the equity market will remain volatile ahead of the general election in the first half of 2019.

Shares of public sector banks will remain in focus after the cabinet on Wednesday approved the merger of Vijaya Bank and Dena Bank with Bank of Baroda. The new entity will be operational from April 01.

The Indian currency was trading at 69.94, 20 paise higher than  Monday's close of 70.14 against the US dollar.

The year which saw heightened volatility in the Indian market weakened the rationale for foreign investors to infuse their funds into Indian bourses.

After wading through the sea of losses in the global markets, we come across numerous bright spots in the Indian indices. The constituents of key benchmark indices, Sensex and Nifty, have recorded growth in double digits during 2018

The currency rose 23 paise to open at 71.33 per dollar. In the equity market, the Sensex fell 185 points at 36,084 and Nifty lost 52 points to 10,837.

The rupee has fallen 13.07 percent since the beginning of this year on stronger US dollar, high current account deficit and record fund outflows by foreign institutional investors.

The BSE SENSEX closed 572.28 points, or 1.59 per cent, lower at 35312.13 and the NSE Nifty ended at 10592.6, down by 190.3 points or by 1.76 per cent. In the Sensex, 29 out of 30 stocks and in the Nifty, 46 out of 50 stocks ended in the negative terrain.

According to the latest depository data, foreign portfolio investors (FPIs) invested a net sum of Rs 6,913 crore in equities in November and Rs 5,347 crore in the debt market.

The domestic currency gained 67 paise to rise past the $70 level after US Federal Reserve Chairman Jerome Powell suggested the pace of interest rate increases might slow. The statement spurred US stock markets to an eight-month high and led the dollar lower, resulting in gains for the rupee.