Benchmark indices Sensex and Nifty edged lower on Tuesday, extending the losing run to the third day amid profit-taking in oil & gas and select FMCG shares.

The BSE Sensex dipped 33.49 points or 0.04 per cent to settle at 84,266.29. During the day, it hit a high of 84,648.40 and a low of 84,098.94.

The NSE Nifty closed marginally lower by 13.95 points or 0.05 per cent to 25,796.90.

Muted trends in global markets and heavy foreign fund outflows weighed on investor sentiment, analysts said.

Sensex has shed nearly 1,570 points or nearly 2 per cent and Nifty declined 419 points or 1.6 per cent since Friday after China announced stimulus measures to prop-up its economy.

Among 30 Sensex companies, IndusInd Bank fell the most by 2.68 per cent. Asian Paints dropped 1.54 per cent and Hindustan Unilever by 1.27 per cent.

Tata Motors fell nearly 1 per cent on disappointing September sales numbers. Tata Steel, Titan, Reliance Industries and NTPC were also among the major laggards.

"Triggered by the recent stimulus policies by the Chinese central bank, funds are shifting to cheaper Chinese stocks from expensive markets like India. This, along with the possible increase in interest rates by the BoJ due to recent political changes, may impact the domestic market in the near term," said Vinod Nair, Head of Research, Geojit Financial Services.

IT shares bucked the trend and helped indices trim losses. Tech Mahindra rose the most by 2.93 per cent among Sensex shares. Mahindra & Mahindra rose by 2.22 per cent on strong sales numbers in September.

Kotak Mahindra Bank, Infosys, HCL Technologies and State Bank of India were among the major gainers.

The BSE smallcap gauge climbed 0.56 per cent and midcap index went up by 0.27 per cent.

Among the indices, telecommunication declined 0.86 per cent, oil & gas (0.71 per cent), utilities (0.35 per cent), realty (0.24 per cent) and power (0.17 per cent).

IT jumped 1.05 per cent, services (0.98 per cent), teck (0.72 per cent), commodities (0.71 per cent), consumer durables (0.41 per cent).

Meanwhile, India's manufacturing sector growth fell to an eight-month low in September amid softer increase in factory production, sales and new export orders, a monthly survey said.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) fell from 57.5 in August to 56.5 in September, registering the weakest pace of growth since January.

In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

Global oil benchmark Brent crude declined 1.66 per cent to USD 70.51 per barrel.

In Asian markets, Tokyo settled higher. South Korea, Hong Kong and mainland Chinese markets were closed for a public holiday on Tuesday. Markets in China will be closed for the rest of the week due to holidays.

European markets were trading on a mixed note. The US markets ended in the positive territory on Monday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 9,791.93 crore on Monday, while Domestic Institutional Investors (DIIs) bought equities worth Rs 6,645.80 crore, according to exchange data.

Sensex tumbled 1,272.07 points or 1.49 per cent on Monday. The Nifty tanked 368.10 points or 1.41 per cent.

Stock markets will remain closed on Wednesday for Mahatma Gandhi Jayanti.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.