Shares opened marginally higher after losing huge ground on Monday with stocks like ICICI Bank recovering smartly on short covering.
Shares in oil marketing companies like BPCL saw a good recovery following reports that the government may not ask these companies to pay subsidies.
Software stocks saw fresh declines in trade with Infosys, HCL Tech and Wipro seeing fresh selling pressure.
Shares in Kaveri Seed dropped after the RBI said that FII limit in the company has been breached. Geometric Software was down a huge 10 per cent after reporting a dismal set of results. This also dragged other software stocks lower.
Wockhardt saw huge unwinding in trade and has now fallen almost 17 per cent in two trading sessions. Analysts say there was huge delivery based selling in the counter.
Most of banking sector stocks were subdued apart from ICICI Bank. Meanwhile, markets across Asia were trading marginally lower with the Singapore Strait Times and the Hang Sang down in trade.