Mumbai: The Sensex slumped 456 points while the Nifty closed below the 18,300-level on Wednesday as market participants pared exposure to overbought counters for the second straight session.
Midcap and smallcap stocks too saw heavy selling amid concerns over frothy valuations, traders said.
The 30-share BSE Sensex ended 456.09 points or 0.74 per cent lower at 61,259.96. Similarly, the NSE Nifty dropped 152.15 points or 0.83 per cent to 18,266.60.
Titan was the top laggard in the Sensex pack, shedding 2.97 per cent, followed by HUL, NTPC, L&T, PowerGrid, Bajaj Finserv and M&M.
In contrast, Bharti Airtel led the gainers' chart with a jump of 4.03 per cent.
SBI, IndusInd Bank, Bajaj Finance, Axis Bank, ITC and HCL Tech were the other winners.
"Indices corrected quite meaningfully led by the expensive side of the market where valuations had got stretched," said S Ranganathan, Head of Research at LKP Securities.
Almost all sectoral indices ended in the red, although PSU banks were seen bucking the trend with investors cherry-picking for value in that pocket, he noted.
Sectorally, BSE consumer durables, basic materials, metal, utilities and power indices lost as much as 3.36 per cent, while telecom closed in the green.
Broader BSE midcap and smallcap indices plummeted up to 2.31 per cent.
Elsewhere in Asia, bourses in Hong Kong and Tokyo closed higher, while Shanghai and Seoul were in the red.
Stock exchanges in Europe were trading mixed in mid-session deals.
Foreign institutional investors were net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 505.79 crore, according to exchange data.