Benchmark share indices ended lower on Tuesday weighed down by selling pressure in rate sensitive shares after double digit retail inflation in February dimmed hopes of a rate cut by the central bank at its policy meet next week.
The 30-share Sensex ended down 81 points at 19,565 and the 50-share Nifty ended down 28 points at 5,914.
In Asia, Japan's Nikkei share average fell on Tuesday, snapping an eight-day winning streak, as investors took profits on recent gainers such as financials and exporters.
The Nikkei closed down 0.3% at 12,314.81 points after earlier rising as high as 12,461.97, its strongest level since early September 2008.
Hang Seng lost 0.9% while Shanghai Composite ended down 1%.
Stocks in Europe were trading mixed.
European shares edged back off four and a half year highs on Monday as weak economic data from China and worries about Italy took the shine off strong US jobs numbers last week.
The CAC-40 was down 0.2% and DAX was trading flat and FTSE was up 0.1%.
Consumer Durables Index was the top loser on the BSE down 2% followed by Power, Realty, Bankex, Capital Goods among others.
Consumer Durables' stocks were down on concerns that high inflation for the past few months has led to lower discretionary spends.
Blue Star and Titan ended down over 3.4% each. Bajaj Electricals and Rajesh Exports lost over 2.6% each.
Among the rate sensitive shares financials shares witnessed profit taking. In the Sensex pack, HDFC Bank, HDFC, ICICI Bank and SBI were among the top losers.
Capital goods space ended lower after data showed that the sector contracted by 1.8%, against its contraction of 0.9% in December 2012. BHEL ended down 2.1% and Larsen & Toubro lost 0.5%.
Tata Power ended down 3.1% after Credit Suisse downgraded the stock to "underperform" from "neutral" and cuts its target price to Rs 83 from Rs 104.
The investment bank says Tata's power plant being built in Mundra should be operational in fiscal 2014, and that the company could post losses of Rs 1,500-1,600 crore per annum in the initial years.
Software shares also witnessed profit taking, Infosys, TCS and Wipro ended down 0.1-1% each.
Among Sensex gainers, Reliance Industries and ONGC ended with marginal gains on expectations of additional inflows as both stocks could see an increase in their weightage in FTSE indexes after a rebalancing last week, according to Citigroup estimates.
Fast moving consumer goods shares ended higher ITC gained 0.6% while Hindustan Unilever end up 1.1%.
Among other shares, MMTC has rallied 6.8% to Rs 318, bouncing back almost 14% from intra-day low, on reports that the empowered Group of Ministers (eGoM) has deferred the decision on share sale.
A2Z Maintenance and Engineering Services ended lower by 1.9% at Rs 25.90, its lowest value since its listing in December 2010, after investor and trader Rakesh Jhunjhunwala and his family sold partial stake in the company through open market transaction.
The broader markets also ended marginally lower. The BSE Mid-cap lost 0.6% and the Small-cap index ended down 0.5%.
Market breadth ended weak with 1,688 losers and 1,205 gainers on the BSE.