The BSE Sensex resumed lower at 25,217.69 points and continued to lose momentum to touch an intra-day low of 25,021.23. It settled at 25,062.67, down 251.07 points, or 0.99 per cent. It had lost 55.16 points on Wednesday. The index's drop on Thursday was its steepest since 274.94-point fall on June18.
Out of the 30-share Sensex, 18 stocks closed with losses led by oil and gas stocks, while 12 others ended higher. The 50-share NSE index Nifty dipped below the crucial 7,500 mark by losing 76.05 points, or 1 per cent, at 7,493.20 after shuttling between 7,570.20 and 7,481.30 intra-day.
"Overall market sentiment was hit as the government decided to defer revision in gas prices for three months. This has been taken negatively by the market, as it was contrary to the general expectations," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
Shares of state-run ONGC plunged by 5.89 percent and RIL fell 3.70 percent. Oil marketing companies BPCL, HPCL and Indian Oil too were under selling pressure.
Expiry of June month series in the equity derivative contracts and fresh selling by foreign funds also affected the market sentiment, dragging down the benchmark indices.
"Sentiment further deteriorated after an update on weak monsoon by IMD," said Jayant Manglik, President-retail distribution, Religare Securities.
Automobile stocks, however, remained firm after the government on Thursday extended excise duty concessions by six months, and capped the fall in the benchmark Sensex. Maruti Suzuki, Bajaj Auto, Hero MotoCorp, M&M ended higher.
Recent outperformers in realty, PSU, metals, banking and power space saw selling. Sectorwise, the BSE oil and gas sector index suffered the most by plunging 3.88 per cent, followed by realty index (2.74 per cent) among others.
Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth Rs 694.63 crore on Wednesday, as per provisional data from the stock exchanges.