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Markets trimmed early losses amid recovery in Asian peers but concerns over foreign capital outflows on account of a weakening rupee continued to dampen investor sentiment.
At 9:40 AM, the Sensex was down 128 points lower at 25,904 and the Nifty slipped 24 points to 7,857.
In the broader market, the BSE Mid-cap and Small-cap indices were down 0.5% each.
Market breadth was weak with 902 declines and 512 gainers on the BSE.
Investors will keenly watch whether the government will be successful in holding a special session of Parliament to clear the crucial bill, GST. Meanwhile, movement of rupee and crude oil are likely to dictate the trend on the bourses.
The Indian rupee was trading 17 paise lower at 66.27 to the US dollar tracking weakness in domestic equities.
Meanwhile, foreign portfolio investors remained net sellers in equities to the tune of Rs 2,080 crore on Tuesday, as per provisional stock exchange data.
GLOBAL MARKETS
Asian stocks staged a recovery after the rate cuts by China's central bank. The People's Bank of China cut interest rates and lowered the reserve ratio late Tuesday in a much-anticipated move that some economists said was long overdue. The Shanghai Composite rebounded after sharp losses in the previous sessions and was up 0.8% while Japan's Nikkei was up 1.1%. The Hang Seng was trading flat while Straits Times was down 0.6%.
US stocks slumped in late trades on Tuesday to erase intra-day gains, adding fresh uncertainty to markets that had seemed to be on the rebound. Dow Jones slipped 1.3%, the S&P 500 dropped 1.4% and the Nasdaq ended down 0.4%.
SECTORS & STOCKS
All sectoral indices were in the red with rate sensitive sectors such as Auto, Bankex and Realty declining the most.
Index heavyweights ITC and Infosys were down over 1.2% each contributing the most to the Sensex decline.
Financials witnessed profit taking after a rebound in the previous session on account of shortcovering. ICICI Bank, HDFC Bank, Axis Bank and SBI were down 0.4-1.4% each.
Auto stocks continued to remain weak on worries over sales growth slowdown in August. Tata Motors, Maruti Suzuki, Hero MotoCorp and Bajaj AUto were down 0.7-2.4% each.
Pharma shares such as Lupin and Sun Pharma were the top gainers along with HDFC and ONGC among others.
