Infosys, HDFC, TCS, Reliance Industries and HDFC Bank were leading contributors in Sensex's fall while Adani Ports, SBI and Cipla outperformed, rising 2-3 percent.
GAIL, ITC, Vedanta, Tata Steel and Hindalco were top gainers while Infosys, Dr Reddy's Labs, Axis Bank, Bajaj Auto and Hero MotoCorp were losers.
France's CAC and Germany's DAX gained 2 percent each followed by Britain's FTSE with 1.7 percent upside on a positive lead from Asia and Wall Street.
Tata Motors, Cipla, ICICI Bank, Hindalco and HUL were top gainers in the Sensex. Among the losers were Hero MotoCorp, ONGC, TCS, NTPC and Vedanta.
All eyes are on the Federal Reserve's statement; street has been pricing in some form of easing today.
Mohammed Apabhai of Citi says the move in the US 10-year yields had caught market by surprise.
It's a weak start to the October series. The markets saw a volatile session on back of negative European cues.