The 30-share BSE Sensex closed 216.24 points lower, on Tuesday, at 34,949.24, while the broader Nifty 50 ended 55.35 points down at 10,633.30. Markets were dragged down by banking stocks, as PSU banks posted losses in the fourth quarter on higher bad loan provisions.
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Shares in Europe and Asia fell as Italy is headed for early polls and uncertainty loomed over the US-North Korea summit.
The rupee on Tuesday weakened against the US dollar.