Ranbaxy Laboratories, majority owned by Japan's Daiichi Sankyo Co, slumped over 17 percent after the US Food and Drug Administration banned more products from the Indian drugmaker.
Rate-sensitive stocks fall after Reserve Bank of India Governor Raghuram Rajan was quoted as saying that inflation was a "destructive disease" that was forcing the bank to keep interest rates high, according to an agency's report.
HDFC Bank falls 1.7 percent, while Tata Motors is down 2.9 percent.
BSE Sensex slides 126 points from record high
(PTI): The benchmark S&P BSE Sensex today dropped from record closing high by losing 126 points in morning trade on profit booking in capital goods, realty, banking, metal and auto sector stocks on the back of lower Asian cues.
The BSE-30 share index resumed lower at 21,289.15 points, and hovered in a range of 21,333.66 to 21,230.03 before quoting at 21,247.94 at 1030 hours.
Sensex had gained over 310 points in the previous four sessions. It showed a loss of 125.72 points, or 0.59 per cent, from its last close.
The NSE 50-share barometer Nifty also fell 39.10 points, or 0.62 per cent, to 6,306.55 at 1030 hours.
Major losers were - BHEL 2.66 pct, Tata Motors 2.39 pct, Tata Steel 1.93 pct, HDFC Bank 1.60 pct, M&M 1.48 pct, Larsen 1.45 pct, SSLT 1.36 pct, HDFC 1.30 pct and Bharti Airtel 1.22 pct.
Asian stocks extended losses in their early trade tracking overnight losses in the US.
Key benchmark indices in Japan, South Korea, Singapore and Hong Kong were down 0.48 to 1.63 per cent, while indices in China and Taiwan rose 0.06 to 0.85 per cent.
US stocks closed sharply lower yesterday as weak economic data from China prompted investors to sell resource stocks and emerging-markets assets and seek safety in bonds, gold, and high-dividend paying sectors.
Meanwhile, foreign institutional investors (FIIs) bought net Rs 433.60 crores yesterday, as per the provisional figures issued by stock exchanges.