Benchmark Sensex declined by 379 points on Tuesday due to profit-taking in bank and IT shares after recent sharp gains and fresh foreign fund outflows.

The 30-share BSE Sensex fell by 379.46 points or 0.53 per cent to settle at 71,892.48.

During the day, it tumbled 658.2 points or 0.91 per cent to a low of 71,613.74.

The broader Nifty declined by 76.10 points or 0.35 per cent to close at 21,665.80.

As many as 31 Nifty shares declined while 19 advanced.

Among the Sensex firms, Kotak Mahindra Bank, UltraTech Cement, Mahindra & Mahindra, Larsen & Toubro, ICICI Bank, IndusInd Bank, Wipro and Hindustan Unilever were the major laggards.

Sun Pharma, Bajaj Finance, Bharti Airtel, Reliance Industries, Bajaj Finserv and Titan were among the winners.

The market extended yesterday's last hour's sell-off, taking negative cues from Asian peers due to weak Chinese manufacturing data and mounting tensions in the Red Sea, which has the potential to disrupt global trade and crude supplies," Vinod Nair, head of research at Geojit Financial Services said.

"Ahead of the impending results season, investors are adopting a profit booking strategy.

"Auto stocks declined on below-expected volume numbers, while pharma stocks were the standout due to catch-up in the US economy," Nair added.

In Asian markets, Shanghai and Hong Kong settled lower while Seoul ended in the green.

Asian, European and US markets were closed on Monday for the New Year.

Global oil benchmark Brent crude jumped 2.05 per cent to $78.58 a barrel.

Foreign institutional investors (FIIs) offloaded equities worth Rs 855.80 crore on Monday, according to exchange data.