Mumbai, Aug 13 (IANS): India's key indices closed in deep red on Tuesday due to selling pressure in index heavyweights HDFC Bank, SBI, Tata Steel and Bajaj Finance.

At close, Sensex slipped 692 points or 0.87 per cent to 78,956, while Nifty was down 208 points or 0.85 per cent to 24,139.

It was the worst session since August 5.

The decline was led by banking stocks with Nifty Bank closing at 49,831, down 746 points or 1.48 per cent. The decline in the banking index is being attributed to heavy selling in HDFC Bank. Shares of the country's largest private lender slipped 3.46 per cent in the trading session.

Selling was also seen in midcap and smallcap stocks. The Nifty Midcap 100 index fell 449 points or 0.78 per cent to 56,881 while the Nifty Smallcap 100 index fell 240 points or 1.30 per cent to 18,203.

According to experts, the domestic market plunged into red terrain in the latter half amid mixed global sentiments. Recent IIP data indicates a lacklustre growth in the major manufacturing sector, while persistent selling by FIIs and elevated valuations is further contributing to the decline.

In the Sensex pack, Titan, HCL Tech, Nestle, Wipro, Sun Pharma, M&M, and Reliance were the top gainers, while HDFC Bank, Tata Steel, Bajaj Finance, SBI, Tata Motors, and JSW Steel were the top losers.

"Despite having minimal impact on the recent adverse developments, the market currently shifts attention towards underlying earnings growth, which remains bleak this quarter and may lead to a downgrade if resilience isn’t shown in the subsequent quarters," a market expert said.

The foreign institutional investors (FIIs) sold equities worth Rs 4,680 crore on Monday, while domestic institutional investors bought equities worth Rs 4477 crore on the same day.