Benchmark indices Sensex and Nifty closed lower on Tuesday after a volatile session, marking the eighth consecutive session of southward movement due to relentless foreign fund outflows and caution ahead of the RBI's interest rate decision.

Giving up early gains, the 30-share BSE Sensex declined 97.32 points or 0.12 per cent to settle at 80,267.62. During the day, it hit a high of 80,677.82 and a low of 80,201.15. In eight trading days, the Sensex has tanked 2,746.34 points or 3.30 per cent.

The 50-share NSE Nifty fell by 23.80 points or 0.10 per cent to 24,611.10.

Netal and banking stocks advanced while realty and consumer durables shares faced selling pressure.

Caution prevailed in the market ahead of the RBI's interest rate decision on Wednesday, analysts said.

Among Sensex firms, ITC, Bharti Airtel, Trent, Bajaj Finserv, Titan and Reliance Industries were the major laggards.

However, UltraTech Cement, Adani Ports, Tata Motors, Bharat Electronics, Bajaj Finance and Hindustan Unilever were among the major gainers. In Asian markets, Shanghai's SSE Composite index and Hong Kong's Hang Seng settled in positive territory, while South Korea's Kospi and Japan's Nikkei 225 index ended lower.

Markets in Europe were trading on a mixed note. US markets ended higher on Monday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,831.59 crore on Monday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 3,845.87 crore, according to exchange data.

The Reserve Bank's Monetary Policy Committee began its three-day deliberations on Monday. The RBI rate-setting panel's decision will be announced on Wednesday.

Global oil benchmark Brent crude dropped 1 per cent to USD 67.29 a barrel.

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