Benchmark indices fell in early trade on Wednesday amid weak trends in global markets, fresh funds outflows and firm crude oil prices. The 30-share BSE benchmark declined 75 points to 55,193.49 points in the early trade. The broader NSE Nifty dipped 33.6 points to 16,450.25 points.
Among the Sensex constituents, Bajaj Finserv, Bharti Airtel, Kotak Mahindra Bank, Dr Reddy's, Bajaj Finance and Reliance Industries were the major laggards.
Larsen & Toubro, Sun Pharma, Hindustan Unilever and UltraTech Cement were among the gainers.
In Asia, markets in Seoul, Hong Kong, Shanghai were trading lower while Tokyo quoted marginally higher.The US markets had ended lower on Tuesday.
"The US Fed announcement on interest rates expected late tonight is unlikely to impact equity markets in a big way since the most likely outcome of 75 bps (basis points) rate hike has been discounted by the markets.
"The market, which continues to be volatile, is swinging between fears of an imminent US recession on one side and hopes of the US avoiding a sharp economic slowdown on the other. Only time will tell which of the two scenarios will play out," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
The BSE benchmark fell 497.73 points or 0.89 per cent to settle at 55,268.49 points on Tuesday. The Nifty had declined 147.15 points or 0.88 per cent to 16,483.85 points.
Meanwhile, international oil benchmark Brent crude climbed 0.10 per cent to USD 104.50 per barrel.
Foreign institutional investors again offloaded shares worth Rs 1,548.29 crore on Tuesday, as per exchange data.