Analysts anticipate volatility in the markets amid hopes of a recovery in GDP for the quarter, especially since economic growth slid to a three-year low in April-June.
"Markets are steadily moving up and there will be pull-backs on odd days," said Sudhakar Pattabiraman, head of research operations at MarketSmith, which is part of financial services provider William O'Neil. "Investors are usually cautious ahead of major data," he added.
Asian shares also fell, stepping back from decade highs as Chinese stocks stumbled for a second straight session. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3 percent.
The Nifty energy index fell about 1 percent with Reliance Industries slipping 0.7 percent on profit-booking, after three straight sessions of gains. The Nifty IT index was down 0.3 percent, on track to snap a three-day gaining streak. Infosys fell 1 percent, after rising in four sessions out of the last five.
Meanwhile, financial stocks rose, with the Nifty finance index rising as much as 0.4 percent to hit a record high. Housing Development Finance Corp Ltd climbed as much as 1.4 percent while HDFC Bank Ltd was up 0.6 percent. Both stocks led gains in the Nifty.