Stock markets had opened on a strong note with the 30-share barometer touching a high of 25,683.97. However, profit booking in IT, auto, power, realty and capital goods stocks pulled the index down to a day's low of 25,364.77.
Extending losses for the second day, the Sensex closed down 137.30 points, or 0.54 percent, to 25,444.81, the lowest closing level since June 30. The gauge had lost 518 points in the previous session.
The broad-based Nifty of the National Stock Exchange dipped below the crucial 7,600 level by losing 38.20 points, or 0.50 percent to 7,585.00, a level not seen since June 27.

During the session, the Nifty shuttled between 7,650.10 and 7,551.65 points.
"After slight disappointment from the rail budget, the market prices today reflected investor's diminishing expectations for strong measures from the government in tomorrow's budget," Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd, said.
The Economic Survey which was tabled in the Parliament on Wednesday too had its effect on the markets, he added.
The survey projected the growth in the range of 5.4 to 5.9 percent in 2014-15 but said that poor monsoon and disturbed external environment remain a cause for concern.
A weak trend in Asian regions and a lower opening in European market also dampened the sentiment.
In 30-BSE index components, 19 stocks declined while 11 ended with gains.
Bajaj Auto fell the most by 3.12 percent among Sensex stocks. Coal India dropped by 2.97 percent and Maruti Suzuki by 2.7 percent.
TCS, Wipro, Infosys, Cipla, HeroMotocrop, Larsen and Tuobro, Mahindra and Mahindra, Sunpharma, Tata Motors and Tata Power also declined.
The auto sector index suffered the most by losing 2.43 percent, followed by power index by 1.69 percent. Realty Index declined by 1.60 percent and Capital goods index by 1.47 percent.


Latest News  from Business News Desk