why does level of mercury in capillary tube is lower than the level outside when capillary tube is inserted in mercury

This can be explained on the basis of cohesive and adhesive forces. The attractive forces between molecules of the same substance are called cohesive forces while those in molecules of different substances are called as adhesive forces. In case of mercury,force of cohesion between mercury molecules is greater than the force of adhesion between them and the capillary tube.This induces mercury to detach from the surface of glass and the level of mercury goes down in the capillary tube.