The S&P BSE Sensex and NSE Nifty 50 Indexes snapped their three-day winning streak dragged by banking shares after the financial irregularities at CG Power and Industrial Solutions highlighted the stress faced by banking and NBFC companies over exposure to companies suffering corporate governance issues, analysts said. The Sensex dropped as much as 182 points while the Nifty 50 Index fell below important level of 11,000. ICICI Bank, Reliance Industries, ITC, HDFC and Axis Bank were top drags in the Sensex today.

The Sensex ended 74 points or 0.2 per cent lower at 37,328 and the NSE Nifty 50 Index declined 37 points or 0.3 per cent to close at 11,017.

CG Power and Industrial Solution shares dropped by maximum daily limit of 20 per cent after the company's Risk and Audit Committee (RAC) said that its total liabilities were understated by Rs. 1,053.54 crore as of March 2018 and by Rs. 601.83 crore as of April 2017.

"The markets witnessed a technical bounce-back in the past few sessions. News of financial irregularities in CG Power and Industrial Solutions has triggered fresh concerns among investors. Banking and non-banking financial companies' businesses are already facing a slowdown," said Jaikishan Parmar, senior equity research analyst-BFSI, Angel Broking.

"A lot of mutual funds have stakes in CG Power. This development brings back concerns of a contagion of NBFC crisis spreading to other sectors," he added.

Yes Bank was top loser in the Nifty 50 basket of shares. The stock plunged nearly 7 per cent to close at Rs 71.55 after Bloomberg reported that the bank owned 13 per cent stake in CG Power and Industrial Solutions.

Indiabulls Housing Finance, Britannia Industries, UltraTech Cement, IndusInd Bank, Bajaj Finserv, Coal India, ITC, Eicher Motors and Axis Bank were also among the losers.

On the flipside, Maruti Suzuki, Tata Motors, HCL Technologies, Infosys, Dr. Reddy's Labs, Mahindra & Mahindra, Hindustan Unilever, TCS and Hero MotoCorp were among the gainers in the Nifty.

Eight of 11 sector gauges compiled by National Stock Exchange ended lower led by the Nifty PSU Bank Index's 2.4 per cent drop. Nifty Realty, Private Bank, Metal, Bank and Financial Services sector gauges also fell between 0.6-1.7 per cent each.

Mid- and small-cap shares underperformed their larger peers as the Nifty Midcap 100 Index declined 0.85 per cent and Nifty Smallcap 100 Index dropped 0.6 per cent.

The overall market breadth was negative as 1,129 shares ended lower wile 645 closed higher on the NSE.