The benchmark indices Sensex and Nifty pared their early gains on Wednesday, with the Sensex falling around 300 points from the day's high, amid profit booking at higher levels.
1) Profit booking: Investors resorted to profit booking at higher levels after the benchmark indices rose for four consecutive sessions. Both indices had gained about 5 percent over the past four sessions and closed at two-month highs in the previous trading session.
2) Weak global cues: Asian markets witnessed sharp losses, with major indices falling to their lowest levels in more than six months as technology stocks declined amid concerns over artificial intelligence spending.
Japan's Nikkei 225 was the worst performer, falling more than 4 percent, while the broader Topix index declined nearly 2 percent.
The MSCI Asia Pacific Index fell as much as 2.3 percent, led by losses in technology stocks. South Korea's Kospi reversed its earlier gains to trade 4 percent lower after rising as much as 3.2 percent. Markets in Taiwan and Japan also declined, while Singapore's benchmark was poised to enter correction territory.