They deflated tyres and broke window panes of several buses and blocked traffic across the city.
At Vikas Marg in central Delhi, a bus was set on fire by an angry mob. Hundreds of policemen and riot police were deployed around the city to keep peace.
Several sensitive areas were barricaded by the authorities to prevent the protesters from gathering.
In similar protests in September four people were killed.
The municipal authorities began sealing shops in residential areas last year after the Supreme Court said that a ban on illegal businesses had to be enforced.
Protests across Delhi have since become widespread.
The main opposition Bharatiya Janata Party (BJP) has appealed to the Supreme Court to review its ruling.
The governing Congress party says it is trying to find a solution for those affected.
Traders say municipal authorities often take money from the poor and the middle-class in return for turning a blind eye to illegal constructions or encroachments on public land.
Effigies burnt
A committee appointed by the Supreme Court has suggested that the current drive to seal illegal businesses in residential areas restart on Thursday.
Meanwhile, the Municipal Corporation of Delhi has filed a petition in the Supreme Court on behalf of the traders, asking for their concerns to be considered.
On Monday, day one of the strike, most schools and colleges and all markets around Delhi were closed.
And although some markets reopened on Tuesday, most shops in Delhi's major commercial centres of Karol Bagh, Greater Kailash, Kotla Mubarakpur and Pitampura remained shut.
Many schools have remained closed for the last three days, fearing violence.
Karol Bagh, normally a buzzing market of clothes, shoes, car parts and jewellery, was deserted on Wednesday.
Hundreds of traders, wearing black caps as a mark of protest, shouted slogans against the Delhi government and burnt effigies of Chief Minister Sheila Dixit.
The drive against businesses in residential areas is expected to affect more than 40,000 traders.
In an earlier decision, the court gave some respite to shops like hair-cutting salons, tea shops and dairies operating from very small premises.
Some says this will benefit almost 10,000 traders.
