The Sensex opened with a positive gap of 14 points at 7,989, and touched a high of 7,995 in early deals.
Selling commenced soon after, and the index plunged to a low of 7,767 in late noon deals - an intra-day swing of 228 points.
The Sensex finally closed with a loss of 2.2% (176 points) at 7,798.
The Nifty shed 56 points to close at 2,353.
SBI plunged over 6% (Rs 54) to Rs 831. Reliance declined 1.7% (Rs 13) to Rs 751. HLL was down Rs 3 at Rs 162. ONGC was up Rs 4 at Rs 936.
Infosys slipped 1.8% (Rs 44) to Rs 2,468. Satyam declined 3% (Rs 18) to Rs 590. TCS dropped Rs 15 to Rs 1,406, and Wipro was down Rs 4 at Rs 373.
Bharti declined over 7% (Rs 25) to Rs 312. ICICI Bank droppednearly 6% (Rs 30) to Rs 481. BHEL lost over 4% (Rs 51) to Rs 1,108.
Tata Motors declined 3% (Rs 14) to Rs 485. While Bajaj was down Rs 32 at Rs 1,733, Maruti declined Rs 18 to Rs 532.
Grasim was down 4% (Rs 47) at Rs 1,106. ACC and Gujarat Ambuja also declined.
Cipla dropped over 4% (Rs 16) to Rs 359. Dr. Reddy's was down Rs 19 at Rs 803. Ranbaxy was up a rupee at Rs 358.
L&T gained over 2% (Rs 29) to Rs 1,386. HDFC moved up Rs 12 to Rs 940. Hero Honda was up Rs 11 at Rs 715.