However, better European opening and continued capital inflows restricted the fall to some extent.
Barring some shares from FMCG and IT segments, others bore the brunt of heavy selling. Second-line scrips suffered the most as retail investors decided to sold shares at the current higher levels ahead of the RBI's monetary policy meeting on January 29.
As a result, Nifty Midcap 50, CNX Midcap and CNX Nifty Junior dipped by 3.55 per cent, 2.66 per cent and 1.72 per cent, respectively.
The 50-issue Nifty resumed up and soon touched a high of 6,065.30 before falling back to settle at one-week low of 6,019.35, showing a drop of 34.95 points, or 0.58 per cent.
Barring, Japan and Singapore, other Asian markets closed in the red amid some dark clouds over earnings from Apple Inc and Hyundai Motor Co. European stocks, however, were quoting slightly better in the afternoon trade.
Foreign Institutional Investors (FIIs) picked up shares worth Rs 814.70 crore yesterday, as per Sebi data.
Top five losers from the Nifty pack were Tata Motors (6.26 pct), Jaiprakash Asso (5.59 pct), GAIL India (4.50 pct), Cipla 3.71 (pct) and Ranbaxy (3.60 pct). Top five gainers were HUL (1.90 pct(, ITC (1.61 pct), L&T (1.53 pct), TCS (1.27 pct) and Kotak Bank (1.24 pct).
Turnover in the cash segment rose sharply to Rs 15,004.45 crore from Rs 12,775.37 crore yesterday. A total of 9,869.83 lakh shares changed hands in 71,46.300 trades. The market capitalisation stood at Rs 67,98.037 crore.