Markets were trading lower on Tuesday and looked set to snap a four-day rally, weighed by metal stocks amid a decline in broader Asian equities and oil prices.
Nifty was down 0.49% at around 17,250, in early trade and Sensex fell 0.44% to around 57,860.
Broader Asian stocks fell stricken by nervousness about an escalation in Sino-US tension, with US House of Representatives Speaker Nancy Pelosi expected to visit Taiwan during the day.
Meanwhile, oil prices dropped on Tuesday, raising investor concerns over a bleak outlook for fuel demand, with data pointing to a global manufacturing downturn.
"Global markets and Asian markets are down but what may support Indian markets is the falling crude and there is a possibility that we don't fall much and get some buying at lower level," said Neeraj Dewan, director at Quantum Securities.
Market participants this week will turn their focus to the Reserve Bank of India's (RBI) monetary policy decision on interest rates on Friday.
With inflation at multi-year highs, the RBI's monetary policy committee is seen raising rates, though the views on the quantum of rate increase were widely split between 25 basis points and 50 basis points, a Reuters poll of economists showed.
In domestic trading on Tuesday, the Nifty Metal fell 1.3% and was the worst performing sub-index. If the losses hold, the metal index is set to snap four straight sessions of gains.
Helping cap some of the losses, the Nifty PSU Bank climbed 2.1%.
Top lender State Bank of India offered a shot in the arm to Nifty, rising 1%, while aluminium and copper manufacturer Hindalco Industries was among the top losers, declining 3.5%.
Among other individual stock moves, food delivery firm Zomato Ltd jumped as much as 18.7% after it reported a smaller quarterly loss late on Monday.
