The weak global cues cast their dark shadow on the proceedings back home and even the belated attempt at pulling the indices from the morass proved to be too little too late.
The Sensex did recoup about 200 points from the day's lows, but still ended weaker by 148 points at 16,936 and the Nifty shut shop at 5,091, down 47 points.
Ditto for the broader markets; the midcap index ended at 6152, down 41 points and smallcap index ended at 6865, down 33 points.
The benchmark indices saw a gap-down opening as the decline in US stocks and euro on Wednesday dampened sentiment post a buoyant session on Wednesday.
They slid further from thereon to retrace all the gains of the previous session before recouping part of their losses in the late-noon session. But the markets are not out of the dumps as yet in what is turning out into an unnervingly volatile week of trade.
The cause for the latest slump is the fading optimism that European leaders will make substantial progress on resolving the euro zone debt crisis at their summit meeting this weekend.
The Federal Reserve's Beige Book report suggesting the US economic outlook was barely growing in September also affected sentiment.
The Dow ended down 75 points and Nasdaq was down 54 points, just enough to send the Asian bourses into a tizzy of sorts. Hang Seng and Seoul shed around 2% each, while the Shanghai, Nikkei and Taiwan lost about a percent each.
There was no solace from the European front either, with the FTSE, CAC and DAX down about a per cent each in opening trades.
Sure enough, the ripple effect manifested itself on the markets back home. But a partial recovery across Europe saw a narrowing in the loss margin.
In macro-economic news, the food price index rose 10.60% and the fuel price index climbed 15.17% in the year to October 8.
In the previous week, annual food and fuel inflation had stood at 9.32% and 15.10% respectively. The primary articles index was up 11.18%, compared with an annual rise of 10.60%
Financials saw a reversal in fortunes on the BSE-30 index post the stellar gains on Wednesday. HDFC tumbled by 3.7% at Rs 647 and ICICI Bank shed 3% at Rs 877.
Select metal stocks also lost their sheen, with Hindalco shedding 2.5% at vRs 124 and Sterlite losing 2.4% at Rs 116. And index heavyweight RIL edged lower by 0.1% at Rs 841.
On the other hand, the recovery in other metal stocks such as Jindal Steel (up 1.8% at Rs 538) and Tata Steel (up 1% at Rs 438), besides Sun Pharma and Infosys (up around a percent each) contributed in arresting the fall.
Among the result candidates for the day, Biocon shed 0.4% at Rs 346 after net dropped 4% for the second quarter ended September 2011 to Rs 85.7 crore compared to Rs 89.2 crore in the corresponding quarter a year ago.
Bajaj Auto Ltd skid by 1.2% at Rs 1615 after reporting a 6% increase in profit after tax to Rs 726 crore for the second quarter ended September 30, compared to the same period last fiscal. The company had posted a net profit of Rs 682 crore in the same quarter in 2010-11.
YES Bank shed 1.7% at Rs 284 after net profit increased 33% to Rs 235 crore for the second quarter ended September, 2011, compared to Rs 176.3 crore in the same quarter a year ago.
Net interest income rose by 23% to Rs 385 crore compared to Rs 313.2 crore in the corresponding quarter a year ago.
Bajaj Finserv rallied 2.8% to Rs 559 after reporting more than two-fold rise in net profit to Rs 158 crore in the September quarter on the back of healthy growth in income from the insurance businesses.
Among the stocks in the news, SAIL firmed up by 0.3% at Rs 146 after deciding against issuing fresh equity though the government will go ahead with its proposal to offload 5% stake in the company.
On the primary market front, M&B Switchgears surged 70% at Rs 317 after listing at Rs 180, a 3% discount against its issue price of Rs 186 a share on the BSE.
The market breadth was weak.
Out of 2902 stocks traded on the BSE, there were 1116 advancing stocks as against 1660 declines.
