Top percentage laggards on the 50-scrip index at the time were Indiabulls Housing Finance, Bajaj Finserv, Adani Ports, Vedanta, Bajaj Finance, and JSW Steel, trading between 1.92 per cent and 6.19 per cent lower.

Market breadth favoured losses, with 411 stocks on the BSE trading higher and 878 moving lower. On the NSE, 453 stocks advanced while 1,095 declined.

HDFC Bank, Reliance Industries, Bajaj Finance and HDFC were the biggest drags on the Sensex.

Fast-moving consumer goods recovered, with the Nifty FMCG index rising as much as 0.91 per cent in morning, after a loss of 0.94 per cent the previous day. Britannia shares jumped 3.88 per cent in intraday trade.

On Wednesday, the Reserve Bank of India released the minutes of its last bi-monthly policy meeting.

Fixing the economy's growth has become the highest priority while a benign inflation outlook has given the central bank room to cut rates although transmission remains inadequate, the minutes of the Monetary Policy Committee meeting which concluded on August 7 showed.

The Sensex and Nifty had ended 0.7 per cent and 0.9 per cent lower respectively on Wednesday, extending their losses to a second straight day.

Equities in other Asian markets were flat on Thursday, with MSCI's broadest index of Asia-Pacific shares outside Japan off 0.2 per cent in very light volumes.

Japan's Nikkei added 0.1 per cent, as did Shanghai blue chips. E-Mini futures for the S&P 500 dipped 0.04 per cent, while EUROSTOXX 50 futures eased 0.09 per cent. Overnight in the US, the Dow Jones industrial average ended up 0.93 per cent, the S&P 500 rose 0.82 per cent and the Nasdaq closed 0.90 per cent higher.