After a positive opening, the BSE benchmark Sensex dropped by 137 points in late morning trade amid cautious trading by investors ahead of results of key corporates.
Selling pressure was mainly witnessed in IT bluechips ahead of India's largest software services company TCS's fourth quarter results.
All other segments saw hectic profit-booking, including realty, power, tech, capital goods, healthcare and banking sectors, followed by mid-cap and small-cap companies.
However, oil & gas, consumer durables and capital goods sector shares witnessed buying interest.
The 30-share index Sensex resumed higher at 28,876.23 and traded in a range of 28,876.23 and 28,658.62 before quoting at 28,663.19 at 1035 hrs, showing a loss of 136.50 points, or 0.47 per cent, from its last close.
The NSE 50-share Nifty also fell by 43.90 points, or 0.50 per cent, at 8,706.30 at 1035 hours.
Major losers were SSLT (1.59 per cent), Wipro (1.59 per cent), Cipla (1.52 per cent), TCS (1.35 per cent), L&T (1.24 per cent), Dr Reddy (1.08 per cent) and HeroMotoCorp (1.03 per cent).
Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 108 crore yesterday, as per provisional data released by the stock exchanges.
Most Asian stocks were trading higher on overnight gains in US markets.
Key benchmark indices in China, Taiwan, Hong Kong, Indonesia and South Korea rose by 0.15-1.95 per cent. Key benchmark indices in Japan and Singapore fell by 0.28-0.37 per cent.
