The benchmark BSE Sensex fell as much as 358 points to hit an intra-day low of 31,915.20 before finishing down 259.48 points or 0.80 percent at 32.014.19. Tata Steel's better-than-expected first quarter earnings, intense buying of shares of companies such as Hindustan Aluminium, Nalco and Vedanta, and a rise in auto, healthcare and IT stocks also contributed to the early gains. MSCI's broadest index of Asia-Pacific shares outside Japan gave up modest early gains to be barely changed, though it was still within a whisker of its recent decade high.
At 11.50 AM: Amid lower Asian cues, Realty stocks and Telecom stocks plunged during afternoon trade.
Among the financials, Punjab National Bank, State Bank of India and Yes Bank dropped between 2 percent and 2.3 percent. Tata Steel, Cipla and Bajaj Auto gained the most.
Bharti Infratel fell 4 percent after a huge block deal.
Other Asian markets experienced a mixed day.
Banks dragged Nifty down with the index testing the 10,000 mark. However, the Hong Kong Hang Seng ended 164.55 points up, and the Shanghai SE Composite index closed flat.
On the currency front, the rupee strengthened by 17 paise to close at 63.63 to a U.S. dollar from its previous close at 63.80.