The benchmark Sensex stock index fell 173 points on Thursday, following losses by the HDFC twins index majors, L&T and HUL as volatility persisted amid the expiration of monthly derivative contracts.
Poor signals from global markets also kept domestic investors on the sidelines, traders said.
The 30-stock Sensex BSE finished 172.61 points or 0.43 percent lower at 39,749.85. The larger NSE Nifty lost 58.80 points or 0.50 percent to 11,670.80.
L&T was the biggest lag in the Sensex pack, with a decline of around 5%, followed by Titan, ONGC, Axis Bank, HUL, M&M and HDFC.
On the other hand, Asian Paints, UltraTech Cement, HCL Tech, Kotak Bank and Reliance Industries were among the winners.
According to traders, market volatility was heightened with the expiration of October futures and options.
The Indian market opened on a moderate note following mixed global signs as coronavirus cases in Europe increased and several countries considered reimposing strict lockdown measures, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers.
During the afternoon session, markets continued to trade weakly with a selloff in metals, autos, real estate and financials, he added.
Stock markets in Hong Kong, Seoul and Tokyo ended on a negative note, while Shanghai was in positive territory.
European stocks were trading higher in the first few trades.
Meanwhile, international benchmark Brent crude oil was trading 3.15 percent lower at $ 38.39 a barrel.
In the forex market, the rupee continued its descent, slipping another 23 paise to close at 74.10 against the US dollar.