Investors turned cautious ahead of the September futures and options (F&O) contracts expiry.
The indices, however, opened in the green as the rupee appreciated earlier after the government raised the import duty on 19 non-essential items on Wednesday in order to arrest its fall and to curb the widening current account deficit.
Almost all the sectors were under selling pressure led by finance, banking and healthcare stocks. However, IT stocks gained due to a weakening rupee. At 1.34 p.m., rupee traded around 72.72 per US dollar, against the previous close of 72.61.
Index-wise, the NSE Nifty50 traded at 10,965.45 points (1.34 p.m.), lower by 88.35 points or 0.80 per cent from the previous close.
The BSE Sensex, which had opened at 36,691.93 points, traded at 36,308.70 points, down 233.57 points or 0.64 per cent from the previous close of 36,542.27 points.
So far, it has touched an intra-day high of 36,711.62 points and a low of 36,255.73.