Mumbai: Stock markets closed lower for the second straight day on Tuesday, with benchmark BSE Sensex declining by 436 points as investors booked profit ahead of the US Federal Reserve's policy decision.

The 30-share BSE Sensex dropped 436.41 points, or 0.51 per cent, to close at a nearly two-week low of 84,666.28. During the day, the barometer plunged by 719.73 points, or 0.84 per cent, to hit an intraday low of 84,382.96 as blue-chip private banks, oil and IT shares retreated. The 50-share NSE Nifty dropped by 120.90 points, or 0.47 per cent, to settle at 25,839.65. In the intraday session, it depreciated by 232.55 points, or 0.89 per cent, to hit a low of 25,728.

Analysts said persistent foreign fund outflows and weak global cues weighed on the investor sentiment. Among the Sensex constituents, Asian Paints, Tech Mahindra, HCL Technologies, Tata Steel, Maruti Suzuki India, Sun Pharmaceuticals, Tata Consultancy Services, ICICI Bank, Bajaj Finance, UltraTech Cement, Mahindra & Mahindra and Tata Motors Passenger Vehicles were the laggards. However, Eternal, Titan, Adani Ports, Bharat Electronics Ltd, State Bank of India, Bajaj Finserv, NTPC and Bharti Airtel were among the gainers.

"Domestic equities opened lower, extending profit booking amid caution ahead of tomorrow's US Fed policy decision, rupee weakness, persistent FII outflows, and ongoing uncertainty over the US–India trade deal. IT stocks led the decline, while PSU banks, realty, and consumer durables gained, with small caps outperforming other indices," Vinod Nair, Head of Research, Geojit Investments Ltd, said.

The US Federal Reserve is set to begin its two-day policy meeting later on Tuesday, where the central bank's Federal Open Market Committee (FOMC) will decide on key benchmark interest rates for the world's largest economy.