The Sensex closed down 120 points at 17,158 and the Nifty lost 38 points at 5,205.
In the broader markets, the midcap index lost 0.2% and the smallcap index slipped 0.1% outperforming the BSE benchmark index which was down 0.7%.
The rupee traded marginally lower by 15 paise to 55.27 against the dollar in early trade today as the American currency gained strength against euro and other Asian currencies.
Asian shares eased as investors took profits and scrambled to cover shorts after positive U.S. earnings failed to dispel pessimism about the creaky global economy as more disappointing data emerged.
Except Hnag Seng and Taiwan Weighted all the other Asian markets closed in the negative. Nikkei down 1.4% was the top loser along with Shanghai Composite and Jakarta Composite losing 0.6-0.7%.
The European markets too were in the red with CAC, DAX and FTSE down 0.1-0.3%.
Back home, among the sectoral indices, Bankex, Capital Goods, Realty and Power indices lost 1% each. Oil & Gas, PSU and Health Care down 0.6-0.7% were the notable losers. Meanwhile, Auto, Consumer Durables and Metal closed in the positive after adding 0.1-0.3%
From the banking counter, Kotak Mahindra Bank, Federal Bank, ICICI Bank, Axis Bank, Indusind Bank, HDFC Bank, HDFC and SBI down 1-3% were the major draggers.
Capital Goods major L&T and BHEL shed 1% and 2.5%
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