The Nifty which was trading higher before the release of inflation data closed the day lower by 28 points.
Among the top losers from the Nifty were Cairn India, Bharti Airtel, Sesa Goa, Bhel, HDFC Bank, HCL Tech, Siemens, Tata Steel and Bajaj Auto. Shares of Tata Power was among the major losers on the Nifty after Credit Suisse downgraded the stock to under perform from neutral.
Notable Nifty gainers were Ranbaxy Laboratories, Ambuja Cements, ACC, Hindustan Unilever, Tata Motors, Reliance and ITC.
Among non index stocks shares of Aanjaneya Lifecare dropped 5 per cent at the lower end of the circuit filter after reports that the company will defer issue of foreign currency convertible bonds (FCCBs) till further notice.
MMTC was one of the star performers in trade today and rallied more than 8 per cent after the Empowered group of ministers decided to postpone a stake sale in the company. The company had dropped more then 3 per cent earlier in trade.
Shares of Core Education dropped after Moody's downgraded the stock with an outlook to negative. PSU banking stocks continued to drop with Oriental Bank of Commerce, Union Bank of India and Syndicate Bank seeing sharp cuts. Private sector banking names also dropped with ICICI Bank and HDFC Bank among the losers.
Realty stocks also saw sharp cuts with DB realty dropping more than 3 per cent, while other prominent losers were United, Sobha Developers and Parsavnath.
Meanwhile, markets in Europe were trading marginally higher, while most of Asia ended the day with losses.
Indian markets are likely to look to the RBI's forthcoming policy for triggers.