The BSE Sensex and Nifty extended fall in the afternoon session with the Sensex sliding over 100 points and Nifty trading below the 9,650 mark after hitting record highs in early morning trade. The Nifty crossed the 9,700 mark for the first time today. Analysts say traders are cautious ahead of the RBI policy meeting on Wednesday.
The Reserve Bank of India (RBI) is likely to keep interest rates unchanged at 6.25 per cent at its review on Wednesday, but likely to sound less hawkish than the last monetary policy committee meeting, according to a Reuters poll.
Sentiment was also subdued after Asian shares fell amid a slew of risk factors, including escalating tensions in the Middle East, the coming testimony of the former FBI director, British elections and a European Central Bank meeting.
"Broader market is correcting as well," said Neeraj Dewan, director, Quantum Securities.
"There isn't any reason to be bullish right now."
The broader Nifty rose as much as 0.35 percent to a record high of 9,709.30, before reversing course and was down 0.37 percent at 9,639.20 as of 1:15 pm.
ITC Ltd's shares fell as much as 2.6 percent in their biggest intraday percentage drop in over a month and were among the top percentage losers on the Nifty.
India Grid Trust fell as much as 6.3 percent in its debut due to a lack of investor familiarity with infrastructure investment fund.
Adani Enterprises Ltd surged as much as 6.90 percent to its highest in one week, after the company gave final investment nod for the Carmichael coal mine and railway in Australia.