The key Indian equity indices opened in the negative territory on Wednesday with the S&P BSE Sensex losing over 100 points.
Auto and metal stocks also witnessed a heavy selling pressure on the indices.
At 9.23pm, the Sensex traded at 36,139.31 points, lower by 115.26 points or 0.32% from the previous close of 36,254.57 points.
It had opened at 36,198.13, and so far it has touched an intra-day high of 36,203.12 and a low of 36,035.78 points.
The Nifty50 on the National Stock Exchange traded at 10,875.30, lower by 34.80 points or 0.32% from the previous close of 10,910.10 points.
On Tuesday, the BSE Sensex closed at 36,254.57, rising 186.24 points or 0.52%; and the NSE Nifty ended at 10,910.10, gaining 47.55 points or 0.44%.
India VIX, the volatility index for equities, was up nearly 4%.
The biggest losers in the Sensex pack include M&M, HDFC twins, Kotak Bank, Reliance Industries, Axis Bank, Tata Steel, Vedanta and ONGC, falling up to 2%.
Among gainers were TCS, Infosys, SBI and Yes Bank, rising up to 1%.
Weakness in Asian stocks and selling by foreign institutional investors hit market sentiment on Wednesday, traders said.
According to Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas, low trading volumes are expected during the week, as worldwide financial markets were closed on New Year day.
Back home, investor is being swayed December Auto sales data released Tuesday, macro data like Nikkei Manufacturing PMI and services PMI due this week and Q3FY19 earnings starting next week, he said.
On a net basis, foreign portfolio investors (FPIs) sold shares worth ₹48.19 crore Tuesday, while domestic institutional investors (DIIs) were net buyers to the tune of ₹142.58 crore, provisional data available with BSE showed.
Elsewhere in Asia, Hong Kong's Hang Seng was down 2.40%, Kospi fell 1.02% and Shanghai Composite Index dropped 1.01% in early trade.
Japanese market and Wall Street were closed on Tuesday.
The rupee opened marginally lower at 69.52 against the US dollar.
Meanwhile, the benchmark Brent crude futures were trading lower by 1.35% at $53.39 per barrel.