After trading below 18,000 in the last hour of trading, the Sensex closed shedding 305 points at 18,022 and the Nifty shed 88 points to end the day at 5,417.In the broader markets, the midcaps closed in line with Sensex, dropping 1.8% and the smallcaps shed 1.6% at 8,478.
Earlier the day, the Sensex had opened in the green on the back of positive Asian markets but quickly pared its gains as the selling by the foreign funds weighed on investor sentiment.
The downfall continued through the day and in the afternnon trades the index had touched a low of 17,997, shedding 409 points from the day's opening.
On the Asian front all the indices closed in the green.
The top gainers for the day were Jakarta Composite gaining 0.8%, Taiwan Weighted and the Nikkei adding 0.5% and 0.4% respectively.
The Hang Seng gained 0.1% to close at 23,483.
In China the official purchasing managers' index (PMI) gauge of manufacturing slipped to 52.9 in January, indicating slowing growth in the sector after December's 53.9 reading.The Shanghai Composite closed adding 0.3%.
The positive mode was seen in the European market too which started in the positive.CAC is up 0.4% while DAX and FTSE are up 0.7% each.
The aviation stocks are trading lower on the bourses since morning after state-owned oil firms hiked jet fuel prices by a massive 4.5%, the biggest hike in almost a year, on the back of spiralling international oil prices.
Among the individual stocks -- SpiceJet is down 11.4%, Jet Airways is down 9% and Kingfisher Airlines is down nearly 9% on the Bombay
Stock Exchange.
The exports data, PMI and auto sales data had some encourging figures.
India's exports in December rose an annual 36.4% to $22.5 billion, while imports for the month fell 11.1% on the year to $25.1 billion, government data released showed.
India's trade deficit in December narrowed to $2.6 billion compared with $8.9 billion in November.
India's manufacturing sector expanded at a slightly faster pace in January on the back of output and new order growth but inflationary pressures persisted, showed HSBC Market Purchasing Managers' Index on Tuesday.
This is based on a survey of around 500 companies, whre the index edged up to 56.8 in January from 56.7 in December.
This was the 22nd consecutive month the key index of manufacturing in Asia's third-largest economy has been above the reading of 50 that divides growth from contraction.
The vehicle sales data for the month of January was released on Tuesday. Chennai-based TVS Motor Company on Tuesday reported a 30%t jump in sales to 165,152 units on a YoY basis while country's largest car-maker Maruti Suzuki India reported a 14.73% jump in sales to 1,09,743 units.
Two-wheeler maker Suzuki Motorcycle India reported 40% growth to 28,598 units and Mahindra & Mahindra's vehicle sales rose 22% to 36,718 units.
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