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Key benchmark indices have extended losses after coming under pressure amid profit booking seen in various heavyweights.
At 11:26am, the 30-share BSE Sensex was down by 120 points or 0.5% at 20,487 while Nifty was down 41 points or 0.6% trading at 6,072 levels.
Broader markets too came under heavy selling pressure with BSE small-cap and mid-cap indices down 1%.
Market earlier touched its 30-month high intra-day level of 20,855 buoyed by buying interest in index heavyweight RIL. Only to pare its initial gains after profit booking set in heavyweights such as ICICI, ITC and HDFC.
At 11:34am, the partially convertible INR was trading at 61.66-a-dollar down by 0.11 over its previous close of Rs 61.55 per dollar.
Japan's Nikkei share average extended its rise into a fifth day on Tuesday, tracking gains on Wall Street after top U.S. lawmakers signalled they could soon reach a deal to reopen the government and avert a possible debt default for now.
The Nikkei was up 0.6 percent at 14,490.92 in midmorning trade after trading as high as 14,510.37. Resistance is seen at 14,606.66, a 61.8 percent retracement of its May high from its June low.
Banking shares are under pressure falling by up to 4% on the National Stock Exchagne (NSE) after higher-than-expected inflation data dents hopes for a rate cut.
HDFC Bank, Bank of India, YES Bank, IndusInd Bank, Union Bank of India, Canara Bank and Kotak Mahindra Bank are down 2-4%.
The NSE banking share index Bank Nifty, the largest loser among the sectoral indices was down nearly 2% compared to 0.51% fall in benchmark CNX Nifty.
Banking stocks - Yes Bank fell 4.5%, Bank of India was down 3.8%, Canara Bank down 3.2 pct, PNB down 2.2 pct, Axis Bank loses 1.9 pct
RIL is up 0.23 pct after rising as much as 3.2 pct in early trade. JP Morgan upgrades Reliance Industries to "overweight" from "neutral" and raises its target price to 1,000 rupees from 800, citing attractive long-term valuations
BSE bankex is down 1.3 pct; IndusInd Bank falls 3.6 pct
Top Nifty losers currently are IndusInd Bank down about 3.6% , Hero MotoCorp down 3.4% , Hindalco down 2.12% and Kotak which is down 1.7 pct
Gold traded in a narrow range on Tuesday, hovering near three-month lows as outflows from gold funds continued and as lawmakers made some progress towards resolving the U.S. budget impasse. It has dropped about 4 percent to below $1,300 an ounce since a partial government shutdown began on October 1.
