Tracking Asian markets, the benchmark indices declined in the early trade on Tuesday. The Barometer Nifty50 slipped near 17,300, while the Sensex declined more than 100 points in the opening trade. With nearly 0.20 % cut each, the former opened at 17,310.15 and the latter started at 58,049.02.

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In the broader market, Nifty midcap and Smallcap also attracted some profit booking as the two indices were seen trading lower by 0.35% and 0.25% respectively  

Among sectoral indices, Nifty FMCG and Nifty Media gained, while others traded in the red. Nifty Metal and Auto were the top laggards among sectoral indices. 

"The market message from the sharp decline in the US 10-year bond yield to 2.57% from the recent high of 3.27% is that the Fed is nearing the end of its tightening cycle with only one more large hike in September and small hikes thereafter, taking the terminal rate to around 3.5%," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. 

This has facilitated the rally in global markets with India emerging as one of the best performers, he said. 

"There is a consensus that India will be the fastest growing large economy in the world this year and next with the least vulnerability to a global growth slowdown. This, and the dollar index dipping to below 106 from the recent high of above 109, have paved the way for the return of FIIs who have turned consistent buyers now," said Vijay Kumar 

The 2100-point rally in Nifty from the June lows has pushed the market into overbought territory with rising valuations, said the expert. "The markets are likely to consolidate in the near-term. Capital goods and autos (the PV and CV segments) are on a strong wicket," he added.  

Speaking on Nifty outlook, Anand James - Chief Market Strategist at Geojit Financial Services, said having closed near 17320, our turnaround point for yesterday, today is likely to be an eventful day. Favoured view expects a dip towards the 17240-110 region, but a burst above 17355, would signal continuation of the 17500 move, James said.  

Earlier, hinting at a negative opening, the SGX Nifty declined by almost 100 points on the Singaporean exchange around 8am on Tuesday. 

Japanese Nikkei 225 dropped 1.6%, Hang Seng Index at the Hong Kong Exchange fell by nearly 3% and Chinese Shanghai Composite was trading lower by 2.3% in early trade on Tuesday.  

Earlier, the US market ended flat with marginal cuts on Monday. Dow Jones declined by 0.14%, Nasdaq fell 0.18% and S&P 500 closed lower by 0.28%.