The BSE Sensex erased its initial gains to trade lower by 95.58 points in late morning deals today on selling in metal, energy, banks, financials and IT counters.
The index had opened positive after BJP's B S Yeddyurappa took oath as chief minister of Karnataka.
Consumer durables, telecom and auto sectors saw buying interest.
The 30-share index was trading at 35,292.30, showing a loss of 95.58 points, or 0.27 per cent.
The broader Nifty-50 index too was trading below the key 10,750-level at 10,713.10, down 28 points, or 0.26 per cent.
Major losers were Tata Steel 2.52 per cent, HDFC 1.34 per cent, Dr Reddy's 1.32 per cent, IndusInd Bank 0.85 per cent and Infosys 0.81 per cent.
Gainers included Tata Motors 1.58 per cent, Coal India 1.42 per cent, Wipro 1.22 per cent, HUL 1.00 per cent and Tata Motors DVR 0.65 per cent.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 699.22 crore on net basis, while domestic institutional investors (DIIs) bought equities to the tune of Rs 229.06 crore yesterday, provisional data showed.
Most Asian markets were trading lower.
US stocks rose yesterday with major indices advancing in a broad rally as investors appeared to shake off fears of rising bond yields, helping equities resume a recent uptrend.
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