Indices shed early gains on Wednesday, with losses across the board as investors took profits in the backdrop of a broader risk-averse sentiment spawned by rising US-China tensions.
Investors are awaiting the outcome of Reserve Bank of India's (RBI) monetary policy meeting expected later this week, with the three-day meeting set to begin on Wednesday.
Nifty was down 0.37% at around 17,300, in early trade, and Sensex fell 0.28% to around 57,980. The benchmark indices looked set to snap a five-day run of gains.
With inflation at multi-year highs, the RBI's monetary policy committee is seen raising rates on Friday, though the views on the quantum of increase were split wide between 25 basis points and 50 basis points, a Reuters poll of economists showed.
"The risk-off mood globally is largely related to the rising tensions between China and US because of US House Speaker Nancy Pelosi's visit to Taiwan," said Saurabh Jain, assistant vice-president, research, at SMC Global Securities,
The market had gone up in the past few days, so some profit taking was expected, Jain added.
In domestic trading, with most of major Nifty sub-indexes trading in the negative, the IT sub-index was the sole gainer, advancing 0.89%.
Weighing on the Nifty were Tata Motors and Maruti Suzuki India , each falling 1.6%. Nifty Auto was among the worst performers, declining 1.22%.
Among other individual stock moves, Zomato Ltd fell as much as 6.8% on reports that the US ride-hailing giant Uber Technologies likely planned to sell its stake in the food delivery firm.
