Benchmark equity indices Sensex and Nifty went into a tailspin after hitting their fresh all-time high levels on Wednesday, closing down by over 1 per cent as investors cashed in on the recent rally.

Erasing all its early gains, the 30-share BSE Sensex crashed 930.88 points or 1.30 per cent to settle at 70,506.31.

The index opened higher and later gained 475.88 points or 0.66 per cent to hit its all-time high of 71,913.07. However, across the board selling dragged the barometer down from record highs and it dropped to a low of 70,302.60.

The Nifty fell by 302.95 points or 1.41 per cent to 21,150.15. During the day, it climbed 139.9 points or 0.65 per cent to reach its record high of 21,593.

"The domestic market saw a sharp and abrupt sell-off in the second half, despite the positive trend in global peers. This is attributable to profit-booking from the recent sharp rally stretching valuations of mid and small-cap stocks. The recent uptick in crude prices prompted investors to book profits," said Vinod Nair, Head of Research at Geojit Financial Services.

All the 30 Sensex shares, except for HDFC Bank, closed in the red. Tata Steel fell the most by 4.21 per cent. NTPC, Tata Motors, HCL Technologies, Mahindra & Mahindra, State Bank of India, Power Grid, Tech Mahindra, Larsen & Toubro and JSW Steel also declined.

HDFC Bank was the only gainer from the pack.

"Markets witnessed a bout of profit-taking and lost nearly one and a half per cent. After the initial uptick, Nifty hovered in a range in the first half however a sharp cut in the heavyweights across sectors completely turned the tone," said Ajit Mishra, SVP - Technical Research, Religare Broking Ltd.

All the indices ended lower, with utilities tumbling 4.65 per cent, telecommunication plummeting 4.36 per cent, power declining by 4.33 per cent, services falling by 4.20 per cent, metal (3.57 per cent), commodities (3.51 per cent), industrials (2.85 per cent), capital goods (2.83 per cent) and consumer discretionary (2.55 per cent).

A total of 3,177 stocks declined while 658 advanced and 86 remainded unchanged.

In Asian markets, Seoul, Tokyo and Hong Kong settled in the positive territory while Shanghai ended lower. European markets were trading mostly lower. The US markets ended in the green on Tuesday.

Global oil benchmark Brent crude jumped 0.76 per cent to USD 79.83 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 601.52 crore on Tuesday, according to exchange data.

In the broader market, the BSE smallcap gauge fell 3.42 per cent and midcap index declined 3.12 per cent.

The BSE benchmark climbed 122.10 points or 0.17 per cent to settle at 71,437.19 on Tuesday. The Nifty went up by 34.45 points or 0.16 per cent to 21,453.10.