However, losses were limited as interest rate-sensitive stocks gained after a better-than-expected December retail inflation data raised hopes that the central bank would cut rates in February.
Brent and US WTI crude oil prices fell to their lowest levels in almost six years on Tuesday as a big OPEC producer stood by the group's decision not to cut output to tackle a glut in the market.
The benchmark BSE Sensex closed down 0.58 per cent at 27,425.73, while the broader Nifty ended 0.28 per cent lower at 8,299.40.
ONGC ended 2.2 per cent lower, while Reliance Industries fell 0.8 per cent.
Shares in Infosys, which had gained 7.2 per cent after its earnings on Friday, fell 1.3 per cent on profit-taking.
(Copyright Thomson Reuters 2015)