The Nifty came within striking distance of a 10 percent drop from its all-time high, edging closer to a technical correction on December 20, while the Sensex slipped nearly 1,300 points from the day's high as broad-based sectoral weakness deepened market jitters.

Nifty IT was the worst performer, falling over 2 percent despite Accenture reporting better-than-expected first-quarter earnings.

The Nifty IT index tumbled 2.6 percent, erasing early gains of nearly 1 percent, as profit booking took hold. Losses in heavyweights like TCS, Infosys, Wipro, and Coforge weighed on the index, despite overnight gains of 2-3 percent in Infosys and Wipro's ADRs on the NYSE, fueled by Accenture's upbeat outlook. Other major indices, including Nifty Bank, PSU Bank, Auto, and Realty, fell up to 2 percent. Nifty Bank was dragged down by HDFC Bank, ICICI Bank, SBI, and Axis Bank.

In a dramatic shift, early gains in Nifty Energy, Pharma, and Metal, which had risen nearly 1 percent each, reversed sharply in the afternoon as selling pressure pushed them deep into the red with losses of nearly 2 percent each.