Equity benchmark Sensex dropped 196 points on Tuesday, hit by fag-end selling in auto and metal stocks following sluggish investor sentiment in global markets.

The selling pressure was triggered after European markets opened in the negative territory amid concerns over the Omicron variant of the coronavirus, traders said.

After rallying over 900 points, the 30-share BSE index surrendered all gains to settle 195.71 points or 0.34 per cent lower at 57,064.87.

Similarly, the NSE Nifty declined 70.75 points or 0.41 per cent to close below the 17,000-mark at 16,983.20.

Tata Steel was the top loser in the Sensex pack, shedding around 4 per cent, followed by Kotak Bank, Bajaj Auto, M&M, Bharti Airtel, Reliance Industries, IndusInd Bank and Maruti.

On the other hand, PowerGrid, Titan, Bajaj Finserv, Nestle India and Bajaj Finance were among the gainers.

Elsewhere in Asia, bourses in Hong Kong, Seoul and Tokyo ended with losses, while Shanghai was positive. Stock exchanges in Europe were in the red in mid-session deals.

Meanwhile, the rupee closed 10 paise lower at 75.17 (provisional) against the US dollar.

International oil benchmark Brent crude tumbled 3.12 per cent to USD 71.15 per barrel.

Foreign institutional investors remained net sellers in the capital market on Monday, as they offloaded shares worth Rs 3,332.21 crore, according to exchange data.

Rupee Pares Initial Gains, Settles 10 Paise Lower At 75.17/Dollar

The rupee on Tuesday pared its initial gains to settle 10 paise lower at 75.17 (provisional) against the US dollar as investor concerns grew over fresh impact of new COVID variant on the economy.

At the interbank foreign exchange market, the local currency opened on a strong note at 74.91 and witnessed an intra-day high of 74.86 and a low of 75.19 against the US dollar in a highly volatile trading session.

The local unit finally settled at 75.17 a dollar, down 10 paise over its previous close.

The rupee on Monday dived 18 paise to close at a five-week low of 75.07 against the US dollar on worries over the new coronavirus variant.

The appreciation bias in the rupee was curtailed, as investor concern has resurfaced about how much damage the new Omicron coronavirus variant may unleash on the economy, traders said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.68 per cent down at 95.69.

Gold Jumps Rs 41; Silver Cracks Rs 667

Gold in the national capital on Tuesday jumped Rs 41 to Rs 47,217 per 10 gram in line with rally in international precious metal prices, according to HDFC Securities.

In the previous trade, the precious metal had settled at Rs 47,176 per 10 gram.

Silver in contrast dipped Rs 667 to Rs 61,337 per kilogram from Rs 62,004 per kilogram in the previous trade.

In the international market, gold was trading with gains at USD 1,794 per ounce and silver was flat at USD 22.94 per ounce.

"Gold prices traded higher with spot gold prices at COMEX trading half a per cent up at USD 1,794 per ounce on Tuesday," according to HDFC Securities, Senior Analyst (Commodities), Tapan Patel.