They said software shares faced the brunt of selling as the sector had seen significant gains after technology companies posted strong quarterly performances for the three months ended September 30.
The Mumbai stock exchange's 30-share Sensex slipped 9.02 points or 0.10 percent to 8,308.78.
Turnover was moderate at 26.85 billion rupees (596 million dollars).
"The market had risen substantially in the last few sessions, and profit taking at higher levels was expected, which is setting in, and software's are leading the fall," said a fund manager with a leading domestic brokerage.
Other blue chip shares also saw losses, with selling seen across key sectors. "There was some buying, however, in stocks like State Bank and a few others as some investors churned portfolios," another dealer said.
India's largest software exporter, Tata Consultancy Services, fell 1.26 percent or 18.65 rupees to 1,456.50 on profit taking after it announced on Tuesday a 23 million dollar acquisition of Comicrom, a Chilean business process outsourcing firm.
Infosys, the country's second largest software exporter, fell 1.20 percent or 31.90 rupees to 2,619.25, while Wipro, the third largest exporter, slipped 1.63 percent or 6.40 rupees to 385.40.
State Bank of India, the country's largest bank, rose 1.58 percent or 13.20 rupees to 846.60.