The benchmark Sensex and Nifty fell over 1 percent on Wednesday on strong selling in banking and oil stocks along with a weak global trend ahead of the US Federal Reserve's interest rate decision.
For the second straight day, the 30-share BSE Sensex fell 796 points, or 1.18 percent, to settle at 66,800.84. It rose 868.7 points or 1.28 percent to 66,728.14 points during the day.
The NSE Nifty fell 231.90 points, or 1.15 percent, to close below 20,000 points at 19,901.40.
U.S. bond yields are rising to a 16-year high and fears of high oil prices fueling commodity inflation also weighed on investor sentiment, analysts said. The general downward trend was also increased by the recent outflow of external funds and caution before many interest rate decisions by the central banks of the world. In addition to the US Federal Reserve, the BoE (Bank of England) and BoJ (Bank of Japan) will meet this week.
Among the Sensex companies, HDFC Bank emerged as the biggest loser, falling 4 percent. Other big laggards were JSW Steel, Reliance Industries, UltraTech Cement, Maruti, Tata Steel, Wipro, Tech Mahindra, Bharti Airtel and Larsen and Toubro.
Power Grid, Asian Paints, Sun Pharma, Axis Bank, NTPC, ITC and Infosys won. In the Asian market, Tokyo, Shanghai and Hong Kong finished lower, while Seoul finished higher.
Business in the European market is in a positive area. US markets ended Tuesday in negative territory.
Brent crude, the global oil benchmark, fell 1.23 percent to $93.18 a barrel, although supply problems persist due to production cuts announced by Saudi Arabia and Russia.

Foreign institutional investors (FIIs) divested shares worth Rs 1,236.51 billion on Monday, stock exchange data showed. Stock markets were closed on Tuesday for Ganesh Chaturthi.
The BSE index fell 241.79 points, or 0.36 percent, to 67,596.84 on Monday after an 11-day rally. The broader Nifty fell 59.05 points, or 0.29 percent, to end at 20,133.30.