Globally, the Hang Seng index lost 0.4 per cent to 27,757.09 points, easing off more than two-year highs hit on Tuesday, while the China Enterprises Index fell 1.1 per cent to 10,962.60 points, Reuters reported.
Around 1 p.m., the NSE Nifty50 of the National Stock Exchange (NSE) traded below the psychologically important 10,000-point mark at 9,942.25 points - down 36.30 points or 0.36 per cent from its previous session's close.
Similarly, the Sensex too witnessed a steep fall in the intra-day trade before ending the trading session at 32,014.19 losing 259.48 points or 0.80 per cent.
Market breadth was in the favour of losers, with about 2 stocks declining to every 1 stock that advanced.
European stocks were trading lower in their afternoon trade as miners came under pressure.
"Major Asian markets ended on a negative note, barring the Jakarta index".
"In the context of the recent SEBI order related to "shell" companies, we reiterate investors to strictly invest only in companies with good corporate governance and strong balance sheets", Sanjeev Zarbade, VP-PCG Research, Kotak Securities said.
Foreign institutional investors (FIIs) were net sellers in the equity segment worth Rs 8.41 billion on both BSE, NSE and MCX-SX on August 9, as per provisional data available at the BSE.
The Indian rupee weakened against the U.S. dollar, tracking mixed Asian currencies market.
"Market went into consolidation as high valuation and lack of fresh triggers influenced investors to stay on the sidelines".
Major index losers were Dr Reddy's 5.04 per cent, BPCL 4.29 per cent, International Olympic Committee 4.16 per cent, Infratel 3.58 per cent and Coal India 2.56 per cent.
Index laggards included NTPC, Dr Reddy's, M&M, Tata Motors, Bharti Airtel, Lupin, Cipla, Hindustan Unilever, Asian Paints, Axis Bank, Hero MotoCorp, HDFC Ltd, Reliance Industries, ITC, ONGC and Sun Pharma, falling up to 1.64 per cent.