Indian shares snapped four-day gains on Tuesday on profit booking in financials and capital goods stocks amid weak Asian cues after North Korea launched a missile over Japan.
The S&P BSE Sensex dropped 1.14 percent at 31,388 while the broader NSE Nifty shed 1.18 percent at 9,796.
Among the top index losers: NTPC fell about 3 percent, Sun Pharma declined 2.3 percent, HDFC fell 2 percent while Reliance Industries was down 2.2 percent.
Shares in Infosys fell 1.4 percent on profit-booking after having risen nearly 8 percent in the last four sessions.
NTPC was the biggest laggard after the government said it will sell a 5 percent stake in top power producer through a stock market auction.
Among the gainers, RBL Bank gained 4 percent while Thyrocare Technologies added 1.2 percent after huge block deals.
Reliance Infrastructure advanced 3 percent on report that Greenko is in talks with the company to acquire its Mumbai electricity business for enterprise value of $1.75-$2 billion.
Market breadth was in the favour of losers, with about 2 stocks declining to every 1 stock that advanced.
U.S. stock futures and Asian share markets tumbled after North Korea fired a ballistic missile over Japan, promising to fan simmering tensions with the U.S.
North Korea fired a missile early on Tuesday that flew over Japan and landed in the Pacific waters about 1,180 kilometers (735 miles) off the northern region of Hokkaido, Reuters reported.
Mirroring the concerns, safe-haven Swiss franc hit a one-month high of 0.9498 franc to the dollar while gold jumped 0.9 percent to $1,324 per ounce, hitting its highest level since Nov 9.