Markets gave up early gains to trade lower on Tuesday, weighed down by IT and consumer stocks, while logistics firm Delhivery surged in its market debut.
The Nifty fell 0.31% to around 16,160 in early trade and Sensex slipped 0.13% to around 54,220, also tracking weakness in broader Asia.
"Markets are in a consolidation mode after a deep correction," said Samrat Dasgupta, chief executive officer at Esquire Capital Investment Advisors.
"Some of the overstretched valuations have normalised, so we do not expect much downside from current levels. However, inflation headwinds can play spoilsport for any market rally."
Indian shares have fallen 5% so far this month as global equities have been under pressure from the Russia-Ukraine conflict, prospects of bigger interest rate hikes to contain surging inflation, and the supply chain crisis which has been worsened by China's zero-COVID policy.
Nifty IT and FMCG were the top decliners among sub-indices on Tuesday, falling 1.5% and 0.9% respectively.
Among individual stocks, textile-to-chemical maker Grasim Industries dropped 4.6% and was the top percentage decliner on Nifty.
Shares of SoftBank Group-backed Delhivery rose as much as 11.6% in their market debut.
Zomato surged 18.5% after the food delivery firm late on Monday reported a 75% jump in quarterly revenue as new customers propelled a surge in order volumes.
Drugmaker Shilpa Medicare jumped 11.4% after the company late on Monday a more than three-fold surge in net profit for the March quarter.
Broader Asian stock markets slipped after a rally on Wall Street was quickly soured by a slide in US stock futures.