Even a sharp fall in annual inflation to 8.98 per cent as at Nov. 1 from 10.72 per cent a week earlier, expected to open the door for further cuts in interest rates, proved little comfort to the market.

Brokerage India Infoline said in a report any rally would be short-lived as the undertone remained sluggish due to financial sector gloom and persistent concerns over the global economy. "All eyes will be fixed on G20 meeting in Washington, as leaders of top countries will talk on what needs to be done to solve the current financial crisis," it said.

The G20 summit of industrialised and emerging economies will explore ways to deal with the world's biggest financial crisis in decades. Leaders will be reminded of the deepening economic gloom by a report expected to show the euro zone has slipped into recession.

Economists have lowered their forecasts for India's economy, with many now expecting growth to slow to 7 per cent or less in the year to March 2009, sharply slower than rates of 9 per cent and higher clocked up in the past three fiscal years.

Shares in Bharti Airtel rose 3 per cent to 650.15 rupees.

Citigroup said it had a "buy" rating on India's top mobile operator with a price target of 900 rupees on expected stable revenue share despite the entry of new players.

In the broader market, 1,593 losers outpaced 934 gainers on normal volume of 286 million shares.

The broader 50-issue NSE index fell 1.34 per cent to 2,810.35.