At 13:28 IST, the barometer index, the S&P BSE Sensex, was down 637.48 points or 0.87% to 73,030.48. The Nifty 50 index declined 242.25 points or 1.08% to 22,093.45.

The broader market underperformed the headline indices. The S&P BSE Mid-Cap index slipped 3% and the S&P BSE Small-Cap index fell 3.81%.

Sellers outnumbered buyers. On the BSE, 395 shares rose and 3,449 shares fell. A total of 63 shares were unchanged.

Economy:

India's consumer price inflation softened marginally in February, data from the Ministry of Statistics and Programme Implementation showed Tuesday. The consumer price index posted an annual growth of 5.09% in February.

This was slightly slower than January's 5.1% increase and economists' forecast of 5.02% rise. In the same period last year, inflation was 6.44%.

Meanwhile, India's industrial production growth moderated in January after accelerating in the previous month, data from the Ministry of Statistics and Programme Implementation revealed on Tuesday.

Industrial output expanded 3.8% year-over-year in January, slower than the 4.2% in December.

Among the major three sectors, mining output grew the most, up by 5.9%. This was followed by a 5.6% rise in manufacturing output and a 3.2% increase in electricity production.

During April to January, industrial production grew 5.9% from the same period last year, data showed.

Gainers & Losers:

ITC (up 4.49%), Kotak Mahindra Bank (up 1.07%), Bajaj Finance (up 0.88%) and ICICI Bank (up 0.72%) major Nifty gainers.

Power Grid Corporation of India (down 5.98%), Adani Enterprises (down 5.97%), Adani Ports and Special Economic Zone (down 5.73%), Coal India (down 5.43%) and NTPC (down 4.95%) were major Nifty losers.

ITC jumped 4.49% after the company said that British American Tobacco (BAT), ITC's largest shareholder, is offloading 3.5% of its stake for over Rs 17,486 crore through a block deal.

Stocks in Spotlight:

Larsen & Toubro dropped 2.24%. The civil construction firm’s construction arm secured a ‘significant order’ for its Buildings & Factories (B&F) vertical from the All-India Institute of Medical Sciences (AIIMS) Madurai, Tamil Nadu.

Vedanta tumbled 4.64%. SEBI ordered Vedanta to pay Rs 77.62 crore to Cairn for delayed dividend payments and barred its board from accessing the capital market.

Shree Cement declined 1.04%. The company said that it has entered into an asset purchase agreement with StarCrete LLP for purchase of operational RMC (ready mix concrete) plants located in Mumbai Metropolitan Region of Maharashtra.

Salasar Techno Engineering fell 4.98%. The company said that it has secured a notification of award (NOA) for 7 distinct contracts aggregately worth Rs 1,033.78 crore from Tamil Nadu Generation and Distribution Corporation (TANGEDCO).

Oriental Rail Infrastructure slipped 3.21%. The company announced that its wholly owned subsidiary, Oriental Foundry has received an order from Ministry of Railways, Indian Railways to manufacture and supply 3,055 BOXNHL Wagons worth Rs 1,249 crore.

Aurobindo Pharma fell 1.70%. Eugia Pharma Specialities, a wholly owned subsidiary of Aurobindo Pharma has started re-distribution of aseptic products manufactured at Unit III, a formulation manufacturing facility located in Telangana, which was temporarily stopped.

Global Markets:

European and Asian stocks advanced on Wednesday after Wall Street jumped overnight, following U.S. inflation data that largely met expectations.

The U.S. consumer price index in February climbed 0.4% on the month and 3.2% year over year, the Bureau of Labor Statistics said on Tuesday.

Overnight in the U.S., all three major indexes climbed after the inflation readings. The tech-heavy Nasdaq saw the biggest jump, while the S&P 500 even reached a new record high.