Markets ended lower for the third straight day on Tuesday weighed down by profit taking in rate sensitives with bank shares leading the decline after hopes of rate cut by the central bank faded.
The 30-share Sensex ended down 65 points at 19,546 and the Nifty ended down 20 points at 5,919.
The broader markets outperformed the BSE benchmark index with the mid and smallcap indices gaining 0.5-0.6% as compared to the 0.3% rise on Sensex.
European markets rebounded on Tuesday to open higher, amid encouraging employment data from Spain and positive cues from the US markets on Monday, led by bank shares.
Among the major indices in the region, CAC-40, DAX and FTSE were trading up 0.4-0.5% each.
Chinese shares were the biggest drag on regional bourses, with Shanghai shares shedding 1.2%.
Japan's Nikkei share average climbed more than 2% to mark its biggest one-day rise in three weeks on Tuesday, as investors scooped up battered stocks such as financials, which had fallen from recent peaks into bear market territory.
Hang Seng and Straits Times ended flat with positive bias.
BSE Consumer Durables index was the top loser among sectoral indices on the BSE down 1.3% followed by Bankex, Auto, Realty and IT indices.
Healthcare index was the top gainer up 1.9% followed by Capital Goods and Power indices.
In the Sensex pack, ICICI Bank, SBI, HDFC Bank and HDFC ended down 0.4-2.1%
Other Sensex losers include, Tata Motors down 2.3% and Reliance Industries ended down 1% at Rs 781.
Infosys ended down 0.8% on profit taking after the stock had surged on Monday after co-founder NR Narayana Murthy was appointed at Executive Chairman.
TCS ended down.
Among pharma shares, Cipla ended up 1.9% while Dr Reddys Labs gained 1.8%.
Among other shares, select non-banking financial companies which are likely to foray into the banking space gained in early trades today after the Reserve Bank of India on Monday allowed new banking licensees to set up banks.
L&T Finance gained 1.8% and LIC Housing Finance rose 1% while SREI Infra Finance gained 1%.
Idea Cellular ended up 4% at Rs 135 amid reports that the telecom major is in talks with Axiata of Malaysia to sell off its tower business.
Shares of Lanco Infratech gained 3% to end at Rs 9.06 after the company late Monday announced that its has bagged new orders worth Rs 3,294 crore.
Shares of Tata Communications gained 1% to end at Rs 196 in early trades after the company announced a 'Telepresence' deal with China Mobile.
Shares of Bata India surged 7% to end at Rs 864 ahead of its Annual General Meeting to be held later today.
Further, a 'buy' call by a local brokerage with a target price of Rs 975 has also boosted sentiment in the stock.
The market breadth ended negative. 1,119 stocks advanced while 1,215 stocks declined on the BSE.