Indian shares posted a minor recovery on Wednesday after the Reserve Bank of India (RBI) kept repo rate unchanged at 6.5 percent, while consumer price index (CPI) inflation forecast for the second half of the current fiscal was lowered to 2.7-3.2 percent from earlier estimate of 3.9-4.5 percent. The policy stance too has been retained at ‘calibrated tightening,’ but the RBI governor Urjit Patel believes there is possibility of space opening up for commensurate policy action, if risks mentioned do not materialise.

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Taking a cue from this, the benchmark Nifty closed with a fall of 87 points at 10,782, while the Sensex dipped 250 points in the red at 35,884. The decline was sharper in the midcap space with the Nifty MidCap index falling 257 points to 17,331, keeping market breadth in favour of declines with NSE Advance-Decline ratio at 1:3 at the close. The Nifty Bank shed 174 points to settle just above 26,500 at 26,519.

IT, ICICI Bank, Sun Pharma, L&T were top index losers, while support came in from HDFC twins, Hindustan Unilever and Reliance Industries.

Sun Pharma fell for the third straight session to see its market cap eroded by nearly Rs 20,000 crore. Another pharma company, Lupin that has received multiple US Food and Drug Administration (FDA) observations for Mandideep Unit, slipped 3 percent in trade. The company maintained that observations are procedural in nature and it is confident of addressing the gaps identified satisfactorily.

In the derivatives space, Nifty 10,700 Put option added 1 lakh shares in the open interest with premium moving 10 percent higher, while Nifty 10,800 Call option added 2 lakh shares with premium slipping 21 percent. The Nifty December Futures closed with a premium of 54 points against a premium of 38 points on Tuesday.

On the global front, stocks in Asia declined on Wednesday after an overnight plunge on Wall Street as investors worried about a potential economic slowdown and the state of the US-China trade war.

The mainland Chinese markets, closely tracked Beijing’s stance in its ongoing dispute with Washington, slipping by the end of their trading day. The Shanghai composite declined 0.61 percent to close at about 2,649.81 and the Shenzhen composite fell 0.48 percent to finish at around 1,380.78.

The Caixin Services Purchasing Managers’ Index, which measures economic activity in China’s services sector, rose to 53.8 in November — its highest in five months — as compared to 50.8 in October.

Earlier in the day, China’s Ministry of Commerce said in a statement on its website that the weekend meeting between Trump and Chinese President Xi Jinping was successful. The ministry also said the two countries will push ahead with negotiations within 90 days, and Beijing will work to address issues agreed upon as quickly as possible.

Meanwhile, the Hang Seng index in Hong Kong also fell by around 1.6 percent. Shares of vehicle maker Baic Motor dropped 10.3 percent following a Bloomberg report that Germany’s Daimler is considering increasing its stake in its joint venture with the Chinese firm.

Elsewhere in Asia, Japan’s Nikkei 225 slipped 0.53 percent to close at 21,919.33, while the Topix shed 0.53 percent to end its trading day at 1,640.49.

The losses were also seen in South Korea, where the Kospi declined by 0.62 percent to close at 2,101.31.

In Australia, the ASX 200 fell 0.78 percent to close at 5,668.40, with most sectors seeing losses on the day.