Markets, which were trading almost flat in late afternoon deals, took a sudden plunge of more than 200 points after reports emerged that German police has sealed off Chancellor Angela Merkel's office to check a suspicious package.

Authorities later lifted the security cordon in Berlin after inspecting a batch of suspicious mail. Resuming higher at 25,628.23, the Sensex touched the day's  high of 25,632.57 on the back of spurt in RIL and a few other blue-chip stocks.

However, the index later slipped into the negative zone and touched a low of 25,357.70 before ending at 25,406.33, a fall of 174.01 points or 0.68 percent. This is the lowest closing since December 15, when it had closed at 25,320.44.

The NSE Nifty also remained under pressure and dropped 43.65 points or 0.56 percent to close the day at 7,741.00. "While the Chinese central bank's decision to lower Yuan's midpoint rate may have helped its equity markets recover, across the globe it added to the weakness in stocks and assets exposed to commodities and minerals," said Anand James Co Head Technical Research Desk Geojit BNP Paribas Financial Services.

Global sentiment, already rattled by row between Iran and Saudi Arabia as well as concerns over China's economy, took a further hit on escalating geopolitical after North Korea claimed its has tested a hydrogen bomb.

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