The BSE Sensex dropped around 150 points, while the broader Nifty traded below the key 6,100 mark on Tuesday as oil prices recovered after slumping on Monday. The rupee, however, was on track for a third straight day of gains and traded at 62.36 per dollar.
Indian markets had rallied 2 per cent on Monday on hopes that the Iran nuclear deal would lead to increased supplies and a sustained decline in oil prices, which would check inflation and cap current account deficit. Traders today questioned how quickly the Iranian nuclear accord could translate into higher supplies.
State-run oil companies fell on profit taking with Hindustan Petroleum Corp down 3.5 per cent after surging 5.7 per cent on Monday. BPCL slumped 5.1 per cent.
Dealers also cited caution among traders ahead of the expiry of November derivatives contracts on Thursday and July-September GDP data on Friday.
The Nifty benchmark on NSE traded 1.4 per cent lower. ICICI Bank traded 1.9 per cent lower, while HDFC Bank fell 1.3 per cent.
The Sensex traded 123 points lower at 20,482, while the Nifty was down 41 points at 6,075 as of 2.40 p.m.
(With inputs from Reuters)
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