The S&P BSE benchmark Sensex snapped two-day winning spree by slipping 89 points due to selling pressure in rate-sensitive counters mainly in banking, consumer durable and auto amidst capital outflows from foreign funds.
Shares of refinery and power sectors also declined on profit-booking at the current levels.
The Sensex resumed slightly higher at 19,329.17, but declined immediately to 19,227.11 before quoting at 19,236.98 at 1030 hrs, showing a net loss of 88.89 points, or 0.46 per cent, from its last close.
The NSE 50-share Nifty also dropped by 30.65 points, or 0.52 per cent, to 5,819.40 at 1030 hrs.
Major losers were Tata Motors (1.97 per cent), Gail India (1.19 per cent), ICICI Bank (1.04 per cent), Hindalco Ind (1.03 per cent) and HDFC (0.92 per cent).
Foreign institutional investors sold shares worth a net Rs 165.09 crore yesterday as per provisional data from the stock exchanges.
Asian stocks were mixed in their early trade. Key benchmark indices in Indonesia, Taiwan, Singapore and South Korea rose by 0.16 per cent to 1.61 per cent, while indices in China, Hong Kong and Japan fell by 0.22 per cent to 0.7 per cent.