According to analysts investors feared that high petrol and diesel prices and a weak rupee would pump up the retail and wholesale inflation rates thereby mitigating chances of a rate cut by the Reserve Bank of India in the near term.
Heavy selling pressure was witnessed in the consumer durable FMCG telecom and capital goods stocks.
On the currency front the rupee traded over 72.30 against the US dollar around 11.35 a.m. at the Inter-Bank Foreign Exchange Market.
At 11.35 a.m. the wider Nifty50 on the National Stock Exchange traded at 11 451.70 points lower by 22.40 points or 0.20 per cent from its previous close.
The S&P BSE Sensex which had opened at 38 017.49 points traded at 37 846.75 points lower by 75.42 points or 0.20 per cent than the previous close of 37 922.17 points.
So far it has touched an intra-day high of 38 043.27 points and a low of 37 838.30 points.
On Monday the Indian equity indices recorded their steepest fall in the last six months as expectations of a rise in inflationary pressure dented the risk-taking appetite of investors.
The NSE Nifty50 closed at 11 438.10 points lower by 151 points or 1.30 per cent from its previous close of 11 589.10 points.
The S&P BSE Sensex which had opened at 38 348.39 points closed at 37 922.17 points lower by 467.65 points or 1.22 per cent from the previous close of 38 389.82 points.
--IANS rv/ksk
