Investors also tracked trends after the passage of the Hong Kong pro-democracy bill in Washington that could derail trade talks between the United States and China.
At the closing bell, the BSE S&P Sensex was down by 336 points or 0.82 per cent to 40,704. The Nifty 50 tumbled down by 95 points or 0.78 per cent at 12,056.
All sectoral indices at the National Stock Exchange were in the red except for Nifty realty which was up by 0.98 per cent. But Nifty media was down by 2.4 per cent, PSU bank by 1.7 per cent metal by 1.2 per cent, auto by 1.1 per cent and FMCG by 0.9 per cent.
Among stocks, Zee Entertainment was the top loser with a dip of 7.8 per cent at Rs 286.50 per share. Metal majors Hindalco and Vedanta lost by 2.1 per cent each while Tata Motors dived by 2.3 per cent.
The other prominent losers were Mahindra & Mahindra, Hindustan Lever, Dr Reddy's, Yes Bank and State Bank of India.
However, Bharti Infratel continued to climb up and added gains of 6.7 per cent at Rs 273.80 per share while Bharti Airtel was up by 1.1 per cent. Adani Ports, utility major NTPC and HDFC Bank were also in the green.
Meanwhile, Asian markets slipped as investors turned cautious, fearing a new US law backing Hong Kong protesters could put hurdles in efforts to end the US-China trade conflict.
Hong Kong led the losses, dropping by 2 per cent while South Korean shares lost by 1.4 per cent and Japan's Nikkei eased by 0.5 per cent.