The companies that have gained the most over the last three-month period are having a high Price/ Earning ratio of 50 to 100 and even more.
The benchmark Index fell 693 point intra-day as it touched a low of 36,888.49 with major heavy weights down 2 to 5 per cent.
Rivals face heat; shares of telecom, multiplex players plunge.
The Sensex plunged 786.94 points intra-day to day’s low of 36,694.18 after a weak start.
The Mid-Cap space then witnessed a sharp recovery from the lows and a gradual up move was seen throughout the session.
The border market saw much severe selling with BSE Mid-Cap Index down 1.58 per cent and BSE Small-Cap Index down 2.13 per cent.
On Tuesday, Indiabulls Housing Finance shares fell another 6.25 per cent after over 10 per cent fall on Monday.
Global markets turned cautious ahead of the two day meet between US-China on trade, analyst said.
For the next week, the stocks of the pharma sector could show positive moves while metal is expected to remain weak: Tiwari.
The Nifty-50 closed down by 15.15 points or - 0.13 per cent at 11331.05, earlier.