Benchmark indices ended on a lower note on Tuesday, marking their third straight session of decline, with the Sensex falling 106 points in highly volatile trade.
The 30-share BSE benchmark settled 105.82 points or 0.19 per cent lower at 54,364.85. During the day, it hit a high of 54,857.02 and a low of 54,226.33.
The NSE Nifty declined 61.80 points or 0.38 per cent to end at 16,240.05.
Among the Sensex firms, Tata Steel, Sun Pharma, NTPC, Titan, Bajaj Finance, Reliance Industries, Tech Mahindra and ITC were among the major laggards.
In contrast, Hindustan Unilever Limited, Asian Paints, IndusInd Bank, UltraTech Cement, Maruti, Kotak Mahindra Bank, HDFC Bank and HDFC were among the gainers.
Elsewhere in Asia, markets in Tokyo, Hong Kong and Seoul ended lower, while Shanghai settled higher.
Equity markets in Europe were quoting higher in the afternoon session.
Stock exchanges in the US had fallen sharply on Monday.
Meanwhile, international oil benchmark Brent crude dipped 1.82 per cent to USD 104 per barrel.
Foreign institutional investors remained in selling mode, offloading shares worth a net Rs 3,361.80 crore on Monday, according to stock exchange data.
"Wall Street plunged to its lowest level in more than a year on Monday, as markets were already hit by rising interest rates. Following the decline in global stocks, Indian equity indexes may face some pressure.
"Asian markets are trading down on expectations of an economic downturn as a result of growing inflation, higher interest rates and harsh COVID-19 lockdown restrictions in Shanghai," said Mohit Nigam, Head - PMS, Hem Securities.
Rupee recovers 12 paise to close at 77.32 against US dollar
Snapping its two-day losing streak, the rupee appreciated 12 paise to end at 77.32 (provisional) against the US dollar on Tuesday, supported by a rebound in regional currencies and fall in crude oil prices.
However, weak domestic equities and persistent foreign fund outflows restricted the gains, forex traders said.
At the interbank forex market, the rupee opened strong at 77.27 against the greenback and moved in a range of 77.20 to 77.45 in the day trade. The rupee finally ended at 77.32, 12 paise higher than its previous close.
In the previous session, the rupee had slumped 54 paise to close at a record low of 77.44 against the US dollar.
"The rupee recovered some lost ground after touching a life low of 77.53 on Monday. Rebound in risk assets and stronger regional currencies supported the rupee in today's session.
"Some stabilisation in risk sentiment after a few days' sell-off could help the local currency while rebound crude oil prices and fund outflows could adversely impact the rupee," said Dilip Parmar, Research Analyst, HDFC Securities.
The backdrop of Fed tightening, growth concerns and an unstable risk environment augur well for the greenback. However, short-term profit booking cannot be ruled out in the dollar index, as it has been facing stiff resistance at around 104, he added.
Brent crude futures, the global oil benchmark, fell 1.15 per cent to USD 104.72 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.03 per cent to 103.68.
Foreign institutional investors remained net sellers in the capital market on Monday, as they offloaded shares worth Rs 3,361.80 crore, as per stock exchange data.