Key equity indices were trading in a narrow range near the day's low in mid-morning trade. The Nifty hovered around 10,900 level. IT stocks displayed strength amid weak rupee.
At 11:20 IST, the barometer index, the S&P BSE Sensex, was down 416.88 points or 1.12% at 36,915.61. The Nifty 50 index was down 121.35 points or 1.1% at 10,901.20.
The S&P BSE Mid-Cap index was down 0.81%. The S&P BSE Small-Cap index was down 0.43%.
The market breadth was weak. On the BSE, 774 shares rose and 1187 shares fell. A total of 118 shares were unchanged.
Commercial vehicle manufacturer Ashok Leyland declined 0.31% after the company's total vehicle sales declined 47% to 9231 units in the month of August 2019 as compared to August 2018.
Neuland Laboratories surged 9.47% to Rs 505 after pharmaceutical company received Establishment Inspection Report (EIR) from the USFDA for its manufacturing facility located at Bonthapally, Hyderabad.
State owned coal producing major Coal India declined 0.05% after reporting production and offtake for the month of August. Coal production declined 10.3% to 34.77 million tonne in August 2019 as compared to 38.78 million tonne in August 2018. The offtake declined by 10.4% to 40.47 million tonne in August 2019 as compared to 45.15 million tonne in August 2018.
Manganese Ore India (MOIL) declined 2.31% to Rs 122.5 after reducing prices of different grades of Manganese Ore. The company slashed prices of Ferro Grade, SMGR (Mn30% & Mn25%), Fines and Chemical Grades of Ore by about 5% prevailing since 1 July 2019.
Most IT shares bucked weak market trend amid sliding domestic currency. Tech Mahindra (up 2.26%), HCL Technologies (up 2.2%), TCS (up 1.45%), Infosys (up 0.79%), MindTree (up 0.36%) and Hexaware Technologies (up 0.19%) gained.
In the foreign exchange market, the rupee edged weakened against the dollar. The partially convertible rupee was hovering at 72.235, compared with its close of 71.42 during the previous trading session. A weak rupee boosts revenues of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
The S&P BSE IT was up 0.91% at 16,296.62.
Overseas, Asian stocks were mixed on Tuesday as the US-China trade tensions continue to rise after China lodged a complaint against the United States at the World Trade Organization over US import duties.
US stock exchanges were closed on Monday for Labor Day holiday. US stocks ended with a lackluster session on Friday as investors were cautious ahead of a holiday weekend in which a fresh round of US tariffs on Chinese imports were due to be levied. US President Donald Trump said the sides would still meet for talks later this month. Trump said his goal was to reduce US reliance on China and he again urged American companies to find alternate suppliers outside China.
The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - as China began imposing new duties on US crude, the latest escalation in a bruising trade war.
In Europe, British Prime Minister Boris Johnson indicated he could call an election to stymie lawmakers' efforts to avert a no-deal Brexit.
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