Dimmed prospects of key economic legislations getting the parliamentary nod in the winter session, coupled with a slowdown in the Chinese economy and falling commodity prices led to a barometer index provisionally closing 259 points down on Wednesday.
Initially, too, both bellwether indices of the Indian equity markets opened on a negative note following their Asian peers.
Moreover, domestic cues like the parliament logjam which has reduced the chances of the Goods and Services Tax (GST) bill getting passed during the winter session, eroded investors' confidence.
Should the bill not secure passage in this session, it will miss its intended roll-out date of April 1, next year.
Foreign investors continued selling of equities in the Indian markets ahead of a likely US rate hike -- further depressing investors -- while the domestic upcoming macro-economic data points, slated to be released on Friday, flared volatility.
In addition, oil and gas and energy companies stocks stayed on their downward trajectory due to a dip in global crude oil prices.
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Besides equities, the Indian rupee, too, remained under pressure.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) shed 259 points or 1.02 percent during the day's trade.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) closed in the red. It provisionally closed lower by 84.25 points or 1.09 percent at 7,617.45 points.
The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,299.34 points, provisionally closed at 25,051.71 points (at 3.30 p.m.) -- down 258.62 points or 1.02 percent from the previous day's close at 25,310.33 points.
The Sensex touched a high of 25,316.95 points and a low of 25,012.22 points during the intra-day trade.
Market observers said the investors' sentiments were subdued due to the logjam in parliament and absence of fresh triggers.
"Markets continued on their downward trajectory. They were dragged lower by parliament's logjam, fall in global commodity prices and upcoming macro economic data which are slated to be released on Friday," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"The negative news for the information technology (IT) industry coming from the US where it has been proposed to cap the H1B visas adversely impacted investors risk taking appetite."