Taking a further hit later in the day, benchmark indices -- Sensex and Nifty -- settled in the red on Tuesday primarily due to profit booking.
Sensex closed 0.7 per cent or 435 points down at 60,177, whereas Nifty dipped 0.5 per cent or 96 points down to 17,957.
For the near-term, the outcome of the Reserve Bank of India's upcoming monetary policy meeting starting Wednesday would be the major factors that will dictate the market outlook.
"Markets took a breather after yesterday's (Monday's) surge and ended marginally lower. After the flat start, the benchmark hovered in a range and ended around the day's low," said Ajit Mishra, VP, Research at Religare Broking.
"Markets may consolidate after the recent surge and it would be healthy. However, there'll be no shortage of trading opportunities, thanks to scheduled events like MPC's monetary policy review meeting and the beginning of the earnings season."
Market participants should focus on the sectors or themes which are playing out well and utilise the pause to accumulate quality stocks on dips, Mishra said.
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