The Sensex and Nifty reversed initial gains to close in the red for the third day running on Wednesday as investors continued to offload IT, consumption and metal stocks despite a largely positive trend overseas.
Unabated foreign fund outflows and rising crude oil prices put further pressure on markets.
Reversing course after a firm start, the 30-share BSE Sensex ended 303.35 points or 0.56 per cent lower at 53,749.26.
Similarly, the broader NSE Nifty declined 99.35 points or 0.62 per cent to end at 16,025.80.
Asian Paints was the top loser in the Sensex pack, plunging 8.04 per cent, followed by TCS, Tech Mahindra, Wipro, Larsen & Toubro, Infosys, HCL Tech and SBI.
In contrast, NTPC, Kotak Mahindra Bank, Bharti Airtel, HDFC, Nestle India, ICICI Bank and ITC were among the major gainers, spurting as much as 3.84 per cent.
“Domestic indices wavered tracking mixed sentiments from the global markets as investors assessed the possibility of a recession in the US followed by the Fed policy tightening.
“Global markets are awaiting the release of the Fed minutes, which will be evaluated for details on the path of the upcoming rate hikes. In this whipsaw market, investors can resort to defensives and value stocks and sectors,” said Vinod Nair, Head of Research at Geojit Financial Services.
S Ranganathan, Head of Research at LKP Securities, said, “On a day when the Bank Nifty held steady, the other sectoral indices led by IT saw intense profit taking by FIIs with geopolitical issues and supply-side disruptions taking centre-stage.”
“Declines outnumbered advances in the broader market even though measures to reign in inflation were taken to curb exports in sectors which have earned bumper profits. A look at the Midcap and Smallcap100 indices today is reflective of the damage done outside the benchmark indices,” he added.
In the broader market, the BSE smallcap gauge tumbled 2.94 per cent and the midcap index lost 1.93 per cent.
As many as 2,611 stocks declined, while 717 advanced and 116 remained unchanged.
Among BSE sectoral indices, IT slumped 3.19 per cent, followed by realty (3.02 per cent), industrials (2.66 per cent), consumer discretionary goods & services (2.47 per cent) and capital goods (2.44 per cent). Finance and bank indices ended marginally higher.
World markets ticked higher ahead of the release of the latest Federal Reserve meeting minutes.
In Asia, markets in Hong Kong, Shanghai and Seoul ended with gains, while Tokyo was modestly lower.
Exchanges in Europe were trading in the green in the afternoon trade. Bourses in the US had mostly ended lower on Tuesday.
International oil benchmark Brent crude jumped 1.37 per cent to USD 115.1 per barrel.
The rupee recovered 3 paise to settle at 77.54 (provisional) against the US currency in muted trade on Wednesday as interventions by banks supported the local unit while a stronger dollar in overseas markets restricted the gains.
Continuing their selling spree, foreign institutional investors offloaded shares worth a net ₹2,393.45 crore on Tuesday, as per stock exchange data.