Market benchmarks declined in early trade on Thursday amid a largely weak trend in global equities and continuous foreign fund outflows.
The BSE Sensex declined 145.4 points to 59,265.68. The NSE Nifty dipped 47.95 points to 17,402.95.
From the Sensex pack, Tata Consultancy Services, Infosys, Maruti, Axis Bank, Mahindra & Mahindra, Tech Mahindra, Tata Motors, Nestle, Asian Paints and Bajaj Finance were the major laggards.
Bajaj Finserv, Larsen & Toubro, Tata Steel and UltraTech Cement were the gainers.
In Asian markets, Japan and Hong Kong were trading lower, while China and Seoul were quoting in the green.
The U.S. markets had ended mostly lower on Wednesday.
"The major concern for global equity markets continues to be the rising bond yields in the U.S., which will act as a drag for FII inflows into emerging markets like India. Yesterday the US 10-year bond yield touched 4%. FIIs cannot be expected to turn buyers in this scenario," said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The BSE benchmark had advanced 448.96 points or 0.76% to settle at 59,411.08 on Wednesday. The Nifty climbed 146.95 points or 0.85% to end at 17,450.90.
"Bears are seen making a comeback in early trade on Thursday following weak sentiment in American and Asian markets. The negative catalyst is that the 10-year U.S. Treasury note yields have spiked to 4%- the highest in four months.
"There is a lot of scepticism among the investors on concerns that if interest rates continue to rise due to inflation uptick, the existing slowdown would take a recessionary turn sooner or later," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
International oil benchmark Brent crude advanced marginally by 0.05% to $84.35 per barrel.
Foreign Portfolio Investors (FPIs) again offloaded shares worth ₹424.88 crore on Wednesday, according to exchange data.