The Sensex was down 184.08 points at 40,083, while Nifty was down 66.80 points at 12,021.70.
The bears took grip over the Indian markets, as the equity benchmark indices ended in the red on Tuesday, led by muted domestic sentiments.
The Sensex was down 184.08 points at 40,083, while Nifty was down 66.80 points at 12,021.70. About 1,108 shares have advanced, 1,428 shares declined, and 175 shares are unchanged.
Zee Entertainment, Hero Motocorp, Asian Paints, HCL Tech and TCS were among major losers on the Nifty, while gainers were Yes Bank, Bharti Infratel, Axis Bank, NTPC and Vedanta.
The Nifty index opened gap down and witnessed selling pressure throughout the session, finally ending the day 0.615 per cent lower at 12,022 levels. The broader market indices 'BSE Mid-Cap & Small-Cap' outperformed the benchmark and closed lower by 0.2 per cent each.
The sectoral indices exhibited mixed trend wherein IT, Healthcare, Oil & Gas witnessed selling pressure and ended lower in the range of 0.8-1.6 15 per cent, while Capital Goods, Metals and Telecom closed in the green.
According to analysts, the Nifty has been struggling to remain above the 12,000 mark and after rising to highs of 12,103 on Monday, the Indian indices gave up and finally closed 66.9 points lower on Tuesday.
"Any further rate cut will pose as a surprise for the markets which can swing the bourses in any direction. Volatility is most likely to remain high in the latter half of the week. The earnings season is at the fag end and therefore the macro economic factors have taken center stage and overshadowed specific industry parameters, says Umesh Mehta, Head of Research, Samco Securities.
Bank Nifty gave up gains in the last hour of trade along with the broader indices. Considering the markets have had a phenomenal performance in the past month due to the Modi hysteria, this correction was expected and the markets have already discounted a 25bps interest rate cut by the monetary policy on 6th June.
"We continue to maintain our cautious stance on the markets at higher levels in the near term. The market participants would keep an eye on the RBI's monetary policy (on June 6th) as it would provide further direction to the markets. While a rate cut cannot be ruled out, we don't expect any aggressive cut and believe that the RBI would await more data on monsoon progress and inflation. Further, domestic macro data, global developments, especially with respect to US-China trade talks and movement of crude oil prices would continue to be on investor's radar," Jayant Manglik, President - Retail Distribution, Religare Broking Ltd.
" Intensified trade tensions and prediction of further delay of the onset of monsoon pushed investors to book profit. However, expectation of further cut in interest rate by RBI, falling oil prices and higher spending will improve earnings outlook. The sentiment remain buoyant despite premium valuation since FIIs are pumping liquidity to India as a chosen long-term equity in the emerging market in this ongoing uncertainty in the global market, says Vinod Nair, Head of Research, Geojit Financial Services Ltd.