The Sensex touched its lowest intraday level since November 26, 2012, while the Nifty touched its lowest intraday level since November 23, 2012.
The falls are in line with lower Asian shares on the back of weak euro zone data, a sluggish debt auction in Italy and fears of a potential run on Cyprus’s banks.
Trading is expected to remain volatile as Thursday marks the expiry of domestic derivatives at the end of the session.
Traders are awaiting October-December current account deficit (CAD) and balance of payments data due later in the day. The CAD hit a record high of 5.4 per cent in the July-September quarter.
The Reserve Bank of India has said the CAD will play a factor in monetary policy decisions.
Rate-sensitive shares came under pressure, with Tata Motors down 2.8 per cent. ICICI Bank fell 0.9 per cent, while Housing Development Finance Corp traded 1.8 per cent lower.
Titan Industries shares too fell 2.8 per cent after 38.78 million shares changed hands at Rs. 250.10 in a block deal on the Bombay Stock Exchange.
Copyright @ Thomson Reuters 2013