India's Sensex fell below the 36,000 mark on Wednesday as investors turned cautious ahead of the Union Budget to be presented on February 1.
Asian shares extended falls while U.S. stocks fell for a second straight day overnight, as the recent rise in global bond yields weighed on equities.
MSCI's broadest index of Asia-Pacific shares outside Japan added to the previous day's losses and dipped 0.2 percent, after reaching a record high on Monday. South Korea's KOSPI rose 0.3 percent and Japan's Nikkei dropped 0.1 percent, Reuters data showed.
The S&P BSE Sensex declined 0.19 percent at 35,965 while the broader NSE Nifty dropped 0.20 percent to 11,027.
Among the top Sensex laggards, Dr. Reddy's fell 4 percent, Tata Steel declined 3.4 percent, Sun Pharma dropped 2.2 percent while Hindustan Unilever was down 2.6 percent.
Bharat Electronics shares plunged 4.4 percent after the company said its board approved buyback of 20.40 million shares at Rs182.50 a share.
Quess Corp lost 5.3 percent after a block deal. Around 3.4 percent stake of the company changed hands in a block deal, according to a Bloomberg report.
Bajaj Auto dropped 0.2 percent after the company said its workers went on indefinite hunger strike at Akurdi and Chakan plants.
Market breadth was in the favour of gainers, with about 2 stocks advancing to every 1 stock that declined.