Markets finished the session on a lower note with Indices snapping the six day winning streak after investors booked profits at higher and attractive levels.
Also, weakness among global peers and dismal June services sector PMI data dampened investors’ sentiment.
The S&P BSE Sensex shed 112 points to close at 27,167 and the Nifty50 dropped 35 points to finish at 8,336. Among broader markets, BSE Midcap and Smallcap indices slipped 0.2% each.
Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services said, "Global equity markets which have been on a denial mode all through last week, reassessed the bullish intent, allowing prices to ease further for the second day.
"Trading holiday in US on Monday, and in India on Wednesday, also seems to have clipped the momentum, while the US jobs data and FOMC minutes scheduled for release later in the week ensured that buyers were less inclined to chase prices higher.
"The expansion of cabinet evoked no major positivity, while data showing June service sector PMI falling to 7 month low gave additional reasons for investors to skim profits from the recent rally, especially ahead of the Q2 earnings season."
In overseas stock markets, Asian and European stocks edged lower as investors became cautious ahead of the release the influential monthly US nonfarm payroll report. The US government will announce nonfarm payroll report for June on Friday.
Shares in mainland China bucked the weak trend in Asia after the latest data showed acceleration growth in China's services sector in June 2016.
The Shanghai Composite index ended 0.6% higher. In Hong Kong, the Hang Seng was currently down 1.43%.
The Caixin China services purchasing managers' index rose to an 11-month high of 52.7 in June 2016 from 51.2 in May.
Readings above 50 indicate an expansion on a monthly basis, while readings below signal contraction.
Back home, growth in India's services firms fell to a seven-month low of 50.3 in June as compared to the previous month of May as new business grew at its slowest pace in the previous 11 months, a business survey showed on Tuesday.
In the political front, PM Narendra Modi inducted 19 new ministers into the Council of Ministers. Government sources said the move will strengthen the Modi-led team with “experience, expertise and energy”.
The rupee lost some ground as it weakened by 8 paise to 67.35 against the dollar at the forex market today following fresh demand for the American unit from importers and banks amid a lower opening in domestic equities.
Among key stocks, Bharti Airtel, GAIL, Tata Motors, Asian Paints and Hero MotoCorp were the top losers in the Sensex pack, down 1%-2%.
The telecom industry is expected to spend Rs 100,000 crore towards spectrum acquisition in upcoming auctions, which will translate into a payment of Rs 37,000 crore upfront. Telecom shares like Bharti Airtel, Idea and MTNL slipped between 0.2%-2%.
Auto majors like Tata Motors, Bajaj Auto, M&M and Hero Motors fell between 0.4%-2%.
The Supreme Court yesterday reportedly reserved its order on the petition seeking modification in the apex court order banning registration of diesel vehicles of 2000 cc and above in the NCR.
Ashok Leyland dipped 6%, extending its Monday 2% decline on the BSE, after the company reported single digit growth in total sales for the second straight month.
Stocks of private sector banks declined upto 2%. Axis Bank, HDFC Bank and ICICI Bank were down 0.5%-1%.
According to media reports, CCEA may clear Axis Bank proposal to raise FDI cap to 74%. Adani Ports and Special Economic Zone gained around 0.5% after the company raised Rs 252 crore through issuance of non-convertible debentures on a private placement basis.
Reliance Industries (RIL) has got approval from the Ministry of Environment & Forests to drill eight additional exploratory wells in Tamil Nadu.
Shares of RIL rose 1%. UltraTech Cement slipped 1% after rallying around 10% in an intra-day trade after the company announced that its board has approved the acquisition of the Jaypee Group’s cement plants at an enterprise value of Rs 16,189 crore.
UltraTech, Jaypee revise cement deal to Rs 16,200 crore Shares of microfinance lender Ujjivan Financial Services moved higher to Rs 429 on the BSE, appreciating more than 100% against its initial public offer (IPO) price of Rs 210 per share.
Shares of fertilisers companies dipped up to 14% on the BSE in intra-day trade after the government announced reduction in prices of key fertilizers.
Coromandel International, Zuari Global, National Fertilisers, Zuari Agro Chemicals, Chambal Fertilisers and Rashtriya Chemicals and Fertilizers were down more than 1%.
Techno Electric & Engineering Company surged 4% on the BSE, after the company announced that the board will meet on July 14 to consider issue of bonus shares.