The benchmark BSE Sensex shed about 68 points to trade at 35,196.44 in early deals on Tuesday on sustained capital outflows by foreign funds amid selling pressure on some counters and weak Asian cues.
Deprecating rupee against the dollar also added to the dampened sentiment.
Most Asian shares dropped as sentiment remained fragile in the face of tense trade relations between the US and major economies, with investors braced for another potentially rocky day for Chinese markets, broker said.
The 30-share index dropped 67.97 points or 0.19 per cent to 35,196.44. The gauge had lost 159.07 points in the previous session on Monday.
In a similar fashion, the NSE Nifty fell 12 points or 0.11 per cent to 10,645.30.
Sectoral indices led by realty, power, metal, healthcare, PSU, consumder durable, FMCG and banking were trading in the negative zone with fall of up to 0.79 per cent.
Major losers were Vedanta, Power Grids, ICICI Bank, NTPC, HDFC Ltd, ITC, Wipro, M&M, Kotak Bank, Coal India, IndusInd Bank, Sun Pharma, Maruti Suzuki and Adani ports, falling up to 3.31 per cent.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,205.12 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 366.94 crore on Monday as per provisional data.
In the Asian region, Japan's Nikkei fell 0.60 per cent, Hong Kong's Hang Seng shed 3.02 per cent in early trade. China's Shanghai Composite index too plunged 1.63 per cent.
The Dow Jones Industrial Average, however, ended 0.15 per cent higher in Monday’s trade.