Indian shares fell from record highs on Thursday tracking Asian peers, and were on track for their first drop in four sessions as uncertainty mounted over U.S. President Donald Trump's future following reports he tried to interfere with a federal investigation.
The dollar was stuck at six-month lows, while Wall Street posted the biggest intra-day slide since September, as pressure mounted on Trump with the U.S. Justice Department appointing former FBI chief Robert Mueller to probe a possible collusion between his election campaign and Moscow.
But analysts said the fall could be a temporary consolidation after both the key indexes hit record highs earlier this week.
"However, there is nothing to panic about; the markets are more active now than, say, they were a fortnight ago. Investors who stuck to the sidelines are likely to re-enter the markets looking for a bargain hunt," said Anand James, chief market strategist at Geojit Financial Services.
"After (Nifty) hitting 9,500 levels, there could be a short consolidation phase."
The Nifty was down 0.69 percent at 9,460 as of 0535 GMT, while the Sensex was 0.51 percent lower at 30,502.70.
Only eight out of 51 stocks on the Nifty were trading in the green.
Shares of Apollo Hospitals Enterprise Ltd fell as much as 2.66 percent after an arm of Malaysian sovereign fund Khazanah looked to exit the healthcare provider by selling its remaining 4.78 percent stake.
United Breweries Ltd, brewer of Kingfisher beer, dropped as much as 4.8 percent after reporting an 87 percent fall in profit for the March-quarter.
Kirloskar Brothers Ltd was up 2.74 percent after reporting an 8.5 percent rise in March-quarter profit.
(Reporting by Arnab Paul in Bengaluru; Editing by Biju Dwarakanath)