After swinging nearly 400 points during the day, the 30-share index settled 173.78 points or 0.45 per cent lower at 38,557.04. The index hit an intra-day low of 38,474.66 and a high of 38,854.85.

Similarly, the broader NSE Nifty ended 57 points, or 0.49 per cent, lower at 11,498.90 in its fourth straight day of losses. During the day, the index hit a low of 11,475.65 and a high of 11,593.70.

Bajaj Finance was the biggest loser in the Sensex pack, losing 4.91 per cent.

Shares of Tata Consultancy Services too finished 1.16 per cent lower after the company's June quarter earnings failed to meet market expectations.

Tata Steel, Tata Motors, Axis Bank, L&T, Hero MotoCorp, M&M, Bajaj Auto and SBI also ended up to 2.94 per cent lower.

Auto stocks fell after the Society of Indian Automobile Manufacturers (SIAM) reported a decline in sales of all vehicle categories in June.

On the other hand, Yes Bank, Sun Pharma, Kotak Bank, ICICI Bank and PowerGrid bucked the weak market trend, rising up to 1.81 per cent.

According to traders, investors also turned nervous after US President Donald Trump on Tuesday launched a fresh attack on India for imposing tariffs on American products.

Trump said it was "no longer acceptable", days after he held talks with Prime Minister Narendra Modi and agreed to sort out the trade related issues.

Later this week, US Commerce Secretary Wilbur Ross and Energy Secretary Rick Perry are scheduled to address a major India centric conference in Washington DC.

Global markets, meanwhile, were awaiting cues from US Federal Reserve Chairman Jerome Powell's testimony before the Congress, traders said.

Elsewhere in Asia, Shanghai Composite Index and Nikkei ended in the red, while Hang Seng and Kospi settled higher.

Equities in Europe were trading lower in their respective early sessions.

On the currency front, the Indian rupee depreciated 6 paise to 68.57 against the US dollar (intra-day).

The global oil benchmark Brent crude futures surged 1.79 per cent to USD 65.31 per barrel.