Among BSE sectoral indices, oil & gas index fell the most by 1.18 per cent, followed by metal 1.14 per cent, PSU 0.61 per cent and consumer durables 0.5 per cent. The gauge had retreated from record high by losing 360.43 points in the previous session.
About 1,711 shares declined against 1,037 advancing shares on the BSE. "Participants ignore the report showing rise in direct tax collections however rebound in selective index majors in last half an hour marginally trimmed the loss", said Jayant Manglik, President, Retail Distribution, Religare Securities.
A weakening rupee, which depreciated by 39 paise to 65.07 against the dollar during the day, too dampened investor sentiment.
At 1 PM: Markets traded in red during afternoon trade.
In terms of the broader markets, the BSE mid-cap closed lower by 1.47 per cent and the small-cap index lost 1.37 per cent.
On the currency front, the rupee weakened by 35 paise to close at 65.03 against the U.S. dollar from its previous close at 64.68. "Oil prices rose 3.5 per cent on Monday, the highest since early July 2015", Desai told IANS. "Shares of aviation companies, Jet Airways, SpiceJet, and InterGlobe Aviation, fell 3-5 per cent on the back of surge in crude oil prices on a global scale", he added.
Provisional data with the exchanges showed that on Tuesday, FIIs invested in scrips worth Rs 461.47 crore. On the other hand, healthcare index gained 0.91 per cent, IT 0.47 per cent, capital goods 0.38 per cent and banking 0.25 per cent.
Major Sensex gainers Wednesday were: Axis Bank, up 3.41 per cent at Rs 545.05; Asian Paints, up 2.51 per cent at Rs 1,170.95; Cipla, up 2.07 per cent at Rs 620.95; Sun Pharma, up 1.89 per cent at Rs 537.80; and Bajaj Auto, up 0.97 per cent at Rs 3,194.