Markets closed lower on Tuesday, giving up more than 1% gains made during the day, as investor sentiment soured in global markets, while rupee hit a fresh record low on concerns of a bigger current account deficit.
U.S. stock futures and European shares fell, while the euro sank to a two-decade low versus the dollar. MKTS/GLOB
The Nifty IT index .NIFTYIT fell 0.7%.
"The U.S. markets were closed on Monday and are starting in negative territory. It is getting cascaded to European markets as well, which might have driven investors in domestic markets to take profits," said Ajit Mishra, vice president research, Religare Broking Ltd.
"The rupee hitting new lows has become constant and there is caution with earnings season setting. The moment investors see markets turning, it triggers a notion that they should also book profits before it evaporates," Mishra said.
The Nifty's volatility index .NIFVIX, which indicates traders' expectations about market instability over the next 30 days, was down 0.9% at 20.7875.
Among individual gainers, PTC India Financial Services PTCN.NS jumped nearly 20% after the non-banking financial company said an independent audit issued a "satisfactory report" after deeming that the company maintained sufficient transparency.
PTC India Financial has been under the Indian market regulator's radar for corporate governance issues. Read full story
Marksans Pharma MARK.NS soared 17.8% after a proposal for a share buyback.
ITC Ltd ITC.NS, which rose over 3% in the previous session, fell 1.7% and was the top loser on the Nifty.