Bears took control of D-Street in the second half of the trading session on Tuesday to push the index below its crucial psychological support level placed at 35,000\. The Nifty50 closed below its crucial support placed at 10,600, which suggests that more pain in offing.

Indian market corrected ahead of the outcome of crucial MPC meet while broader market took a hit after BSE on Monday decided to bring 109 companies under surveillance which also dented the sentiment.

Stocks which were bought under surveillance include names like Reliance Naval and Engineering, Amtek Auto, GVK Power & Infrastructure under enhanced surveillance measures. "...100 percent margins shall be applicable with effect from June 6, 2018, on all open positions as on June 5, 2018, and new positions created from June 6, 2018, onwards," the exchange said in a circular.

The S&P BSE Sensex closed 108.68 points lower or 0.31 percent at 34,903.21 while the Nifty50 ended 35.35 points down at 10,593.15.

On the sectoral front, the S&P BSE Energy index rose 0.25 percent, followed by the S&P BSE oil & gas index which ended 0.10 percent higher.

On the losing front, the S&P BSE Telecom index ended 3 percent lower, followed by the S&P BSE Capital Goods slipped 1.9 percent, and the S&P BSE IT index was down 1.5 percent.