Benchmark indices declined on Tuesday after a three-day rally, with the Sensex falling 407 points in early trade, mainly dragged down by selling in index majors Infosys, TCS and HDFC.

The 30-share BSE Sensex was trading 406.66 points lower at 55,519.08. The broader NSE Nifty declined 119.4 points to 16,542.

From the Sensex pack, Titan, Infosys, HDFC, HCL Technologies, Hindustan Unilever, TCS, Sun Pharma, RIL and Kotak Mahindra Bank were the major laggards.

In contrast, M&M, Tata Steel, Power Grid, Maruti Suzuki and NTPC were the gainers.

Elsewhere in Asia, markets in Seoul, Shanghai, Hong Kong and Tokyo were quoting with gains.

Stock markets in the US were closed for a holiday on Monday.

The Sensex rallied 1,041.08 points or 1.90 per cent to settle at 55,925.74 on Monday. The Nifty jumped 308.95 points or 1.89 per cent to close at 16,661.40.

Meanwhile, international oil benchmark Brent crude jumped 0.91 per cent to USD 122.78 per barrel.

Foreign institutional investors turned net buyers as they bought shares worth Rs 502.08 crore on Monday, as per stock exchange data.

"The dominant factor determining the market direction, going forward, would be the trend in the US market, which, in turn, would be determined by the inflation in the US and the Fed's response to it.

"A major headwind for the Indian economy and markets is crude spiking above USD 120 on EU sanctions on Russian oil," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.