Benchmark indices Sensex and Nifty drifted lower in early trade on Tuesday amid uncertainty over the next round of US–Iran negotiations in Doha.
Fresh foreign fund outflows and decline in blue-chip IT stock also weighed on the sentiments.
The 30-share BSE Sensex declined 103.95 points to 76,624.42 in early trade, paring its opening gains. The 50-share NSE Nifty dropped 40.10 points to 23,908.80.
From the Sensex pack, Infosys, Tata Consultancy Services, Tata Steel, HCL Tech, Hindustan Unilever and Eternal were among the major laggards.
Maruti, Axis Bank, Power Grid and Bharti Airtel were among the gainers.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,350.10 crore on Monday, according to exchange data.
Brent crude, the global oil benchmark, traded 0.56 per cent lower at USD 72.74 per barrel.
"Indian equity markets are expected to trade with a cautious bias as investors closely monitor renewed geopolitical tensions ahead of the next round of US–Iran negotiations. Investor attention is now firmly focused on the upcoming negotiations in Doha, with hopes that diplomatic progress will help ease regional tensions," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index quoted higher, while Hong Kong's Hang Seng index traded lower.
US markets ended higher on Monday, with the Nasdaq Composite surging 2.07 per cent and S&P 500 climbing 1.18 per cent.
On Monday, the Sensex declined 372.10 points, or 0.48 per cent, to settle at 76,728.37. The Nifty dropped 109.75 points, or 0.46 per cent, to end at 23,946.25. PTI SUM SUM ANU ANU