The Bombay Stock Exchange benchmark Sensex snapped its six-day long rally on Wednesday by losing nearly 86 points on selling in banking and capital goods stocks.
The 30-share Sensex, which was on an upward march for six straight sessions, fell by 85.83 points to end the day at 16,698.04.
The index touched the day's low of 16,589.45 and a high of 16,871.27 points.
Trading sentiment turned weak as some of the metal stocks fell from their recent highs after the Prime Minister Manmohan Singh asked steel producers not to fall prey to temptations and market manipulation due to excessive demand.
The wide-based National Stock Exchange index Nifty fell by 26.50 points at 5,022.80. It touched the day's low of 5,003.55 and a high of 5,083.50 points.
Marketmen said selling also emerged as market participants indulged in clearing their pending positions a day before the monthly expiry of derivatives contracts which end on the last Thursday of each month.
The major pull came from banking sector which suffered the most on fears of fall in business on rising infrastructure costs and reports of some banks burning their fingers in the US housing sub-prime mortgage crisis.
Banking index plunged by 164.37 points at 8552.46 followed by PSU ibndex by 123.81 points at 7843.75. Capital goods index lost 157.74 points at 13,770.97, oil and gas index by 94.57 points at 11382.82, consumer durable by 55.54 points at 4377.21.