Mumbai: Caution ahead of the RBI's monetary policy review, along with negative macro-economic data point, depressed the key Indian equity indices on Tuesday.
According to market observers, heavy selling pressure was witnessed in the capital goods, consumer durables and IT stocks.
Index-wise, the broader Nifty50 of the National Stock Exchange (NSE) closed at 10,593.15 points -- down by 35.35 points, or 0.33 per cent -- from its previous close.
Similarly, the barometer 30-scrip Sensitive Index (Sensex) settled in the red. It opened at 35,029.45 points, closed at 34,903.21 points -- lower by 108.68 points, or 0.31 per cent -- from its previous session's close of 35,011.89 points.
Sensex touched a high of 35,073.12 points and a low of 34,784.68 points during the intra-day trade.
"Markets corrected further on Tuesday after a volatile trade session. It was the third consecutive session of losses for the Nifty," said Deepak Jasani, Head of Retail Research at HDFC Securities.
"Broad market indices like the BSE Mid Cap and Small Cap indices fell more, thereby underperforming the main indices."
Geojit Financial Services Head of Research Vinod Nair said: "Consolidation continued as investors turned cautious ahead of RBI monetary policy and rupee is marginally weak due to liquidity constraint."
"Investors are expecting a status quo on policy rates, but RBI's commentary would be keenly watched. The elevated levels of crude will influence RBI's stance on inflation. Earnings cycle is yet to pick up while the divergence in expectation and actual results could trigger downgrades in FY19 estimates."
The RBI's MPC began its three-day meet from June 4 to 6 here on Monday. It is expected to announce the second monetary policy review for 2018-19 on Wednesday.
Further, analysts said that investor sentiments were subdued after seasonally adjusted Nikkei India Services Business Activity Index showed a contraction in last month's output.
On the currency front, the Indian rupee weakened against the US dollar to 67.15, from its previous close at 67.12 per greenback.
Investment-wise, provisional data with exchanges showed that foreign institutional investors sold scrip worth Rs 157.51 crore, while the domestic institutional investors bought stocks worth Rs 474.33 crore.
Sector-wise, the S&P BSE capital goods index fell by 362.23 points, the consumer durables index was down by 278.27 points and the IT index ended 203.06 points lower.
On the other hand, S&P BSE oil and gas index gained 14.85 points followed by the energy index which inched up by 9.94 points.
The major gainers on the Sensex were Reliance Industries, up 0.90 per cent at Rs 947.85; Tata Steel, up 0.88 per cent at Rs 571.95; HDFC, up 0.78 per cent at Rs 1,847.05; Maruti Suzuki, up 0.69 per cent at Rs 8,810.35; and HDFC Bank, up 0.68 per cent at Rs 2,060.55 per share.
The top losers were Coal India, down 2.36 per cent at Rs 285.40; Bharti Airtel, down 2.16 per cent at Rs 363.80; Larsen and Toubro, down 1.93 per cent at Rs 1,344; Dr Reddy's Labs, down 1.87 per cent at Rs 1,959.60; and Yes Bank, down 1.84 per cent at Rs 336.70 per share.