At 11:30 am, BSE Sensex traded 81.62 points low to 26504.93. NSE Nifty lost 28.95 points to 7984.95.

The 30-share index was trading lower by 85.51 points, or 0.32 per cent, at 26,501.04 as banking, oil & gas, capital goods, PSU and IT sector stocks succumbed to profit-booking.

The gauge had advanced 215.57 points in the previous two sessions on strong factory output data and steady inflation.

Similarly, the Nifty slipped below the 8,000 mark by falling 35.45 points, or 0.44 per cent, at 7,978.45.

Brokers said a sell-off in global equities as Greece struggles to find a debt reforms compromise with its creditors, fueling fears of a default and exit from the euro zone, contributed to the slide.

Among other Asian markets, Hong Kong’s Hang Seng was down 0.49 per cent while Japan’s Nikkei shed 0.63 per cent in early trade today.

The US Dow Jones Industrial Average ended 0.60 per cent down in yesterday’s trade.

Reuters- Asian stocks slipped on Tuesday as financial markets braced for the possibility of Greece defaulting on its debt, while a two-day policy meeting of the U.S. Federal Reserve’s monetary committee starting later in the day also prompted caution.

Spreadbetters saw Britain’s FTSE, Germany’s DAX and France’s CAC opening a shade lower on fermenting “Grexit” concerns.

Global equity markets have felt the pinch after talks between Athens and its creditors broke down over the weekend, with Greece only having two weeks before it has to repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund. Sentiment soured further on Monday as both sides hardened their stance.

“The macro duo of the FOMC and Greece continue to create jitters – it will be a daily theme for the next month; in the case of the Fed, the next three to four months,” Evan Lucas, market strategist at IG in Melbourne, wrote.

With the euro zone finance ministers’ meeting on the Greek issue not until Thursday, attention turned to U.S. monetary policy.

The two-day Federal Open Market Committee (FOMC) meeting begins later on Tuesday and the focus was on whether the U.S. central bank will offer a hint of an interest rate rise later in the year.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.4 percent. Shanghai lost 1.3 percent and South Korea’s Kospi fell 0.8 percent. Japan’s Nikkei dropped 0.5 percent, with external factors overcoming bullish domestic incentives.

“The Japanese economic recovery is gaining momentum so the market could have gone up but a correction in overseas equity markets is weighing,” said Masayuki Kubota, chief strategist at Rakuten Securities in Tokyo.

Australian shares bucked the trend and gained 0.2 percent as hopes for more easing by the Reserve Bank of Australia overcame Greek woes. Newly published minutes from the RBA’s meeting reaffirmed the central bank’s stance that it would consider further cuts if needed.

In currencies, the euro did not feel a sustained impact from the ongoing Greek debt saga, while there was some speculation the Fed meeting could spring a surprise or two that weakens the dollar.

The common currency steadied after erasing losses overnight as the shock of failed talks between Greece and its creditors on Sunday faded for the moment. The euro was little changed at $1.1280, having pulled back from an overnight low of $1.1189.

The dollar received a small lift after Bank of Japan Governor Haruhiko Kuroda said his remarks on the yen last week were not an assessment of nominal forex levels. Kuroda had caused a sharp drop in the dollar last week when he told parliament the yen was already “very weak”.

The dollar was up 0.2 percent at 123.57 yen after rising to 123.815.

U.S. crude oil rose as a tropical storm hit the coast of oil-producing Texas. U.S. crude was up 1 percent at 60.14 a barrel, paring the previous day’s losses suffered on Greek debt angst. Brent climbed 0.5 percent to $65.25 a barrel.