On Tuesday, the 30-share Sensex declined 59.92 points to end at 20,547.62 and the 50-share Nifty was down 23.65 points at 6,089.05 levels.
The benchmark 10-year bond yield rose 9 basis points on the day to 8.66 percent, while the partially convertible rupee closed at 61.8350/8450 per dollar compared with Monday's close of 61.55/56.
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Meanwhile, Asian stocks swung between gains and losses as US lawmakers resumed talks to avoid a default ahead of tomorrow’s deadline to raise the debt ceiling.
China’s Shanghai Composite shed 1.4% to 2,203, Japan’s Nikkei rose 0.1% to 14,455, Hong Kong’s Hang Seng dropped 0.4% to 23,247.
Overnight, US stocks ended lower onimpasse over debt ceiling.
The Dow Jones industrial average ended down 133.25 points, or 0.87 percent, at 15,168.01. The Standard & Poor's 500 Index was down 12.08 points, or 0.71 percent, at 1,698.06. The Nasdaq Composite Index was down 21.26 points, or 0.56 percent, at 3,794.01.