The two key equity benchmarks, Sensex and Nifty, on Tuesday erased their opening gains and sank lower tracking selling pressure in IT and financial shares amid mixed global cues. At 10.10 am, the BSE Sensex dropped 225 points to 71,090. On the other hand, the NSE Nifty50 was trading at 21,343, down 75 points.
On the 30-share Sensex platform, TechM, TCS, Bajaj Finserv, Wipro, Sun Pharma, Infosys were among the losers. On the flip side, Nestle, Axis Bank, L&T, ITC, Airtel, HUL emerged gainers.
Among specific stocks, Vedanta gained 2 per cent after the company announced Rs 11 per share dividend.
A total of 1,679 shares gained, 1,309 declined, while 101 remain unchanged.
In the broader market, the BSE Midcap index was down marginally, while the Smallcap index rose 0.3 per cent.
In the previous session on Monday, the S&P BSE Sensex closed at 71,315, down 169 points, while the NSE Nifty50 settled at 21,419, down 38 points.
"The market is likely to move into a consolidation phase as the Christmas holidays and the New Year approach. A period of consolidation after the sharp run-up of the last two weeks is also desirable since it will make the market healthy," said V K Vijayakumar, chief investment strategist, Geojit Financial Services.
In Asia, markets were mixed even as the Bank of Japan maintained its ultra-loose monetary settings on Tuesday in a widely expected move, underscoring policymakers' preference to await more clues on whether wages will rise enough to keep inflation durably around its 2 per cent target. Tokyo traded in the positive territory, while Seoul, Shanghai and Hong Kong quoted lower. The US markets ended with gains on Monday.
Global oil benchmark Brent crude climbed 0.12 per cent to $78.04 a barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 33.51 crore on Monday after continuous buying, according to exchange data.
Meanwhile, the Indian rupee dropped 3 paise to 83.13 against the US dollar in early trade on Tuesday amid firm crude oil prices and outflow of foreign funds from domestic equity markets. The rupee, however, found support due to marginal weakness in American currency and positive sentiment in the equity markets, forex traders said.
At the interbank foreign exchange, the domestic currency opened at 83.10 against the dollar and then slipped to 83.13 gainst the greenback, registering a fall of 3 paise over its previous close. In early deals, the local unit was oscillating between 83.09 and 83.13 versus dollar. On Monday, the Indian currency settled at 83.10 against the dollar.