Dealers attributed the late sell-off to liquidation of long positions in the derivatives segment on expiry of the May series. "It (sell-off) was on account of the VWAP (volume weighted average price) effect in the last hour of trade, where investors sell off positions that they cannot roll over," said Yogesh Radke, derivatives analyst, Edelweiss Securities.
The Nifty came precariously close to breaking the 4800-mark on late selling. The index closed at 4835.30, down 83.05 points or 1.7 per cent. Intraday, it touched a low of 4801.90 and a high of 4957.40. The Sensex ended at 16,316.26, down 209.11 points or 1.3 per cent. It touched a high of 16,666.03 and a low of 16,196.02 during the day. The combined exchange turnover was over Rs 243 billion, compared with Rs 188 billion in the previous session.
Some selling could also be attributed to caution ahead of inflation and gross domestic product data to be released on Friday, and fears of a possible fuel price hike. Tata Motors, down 8 per cent at Rs 583, was the worst hit on the Nifty. There are equity dilution fears after the company announced plans to raise Rs 72 billion via three rights issues. Mahindra & Mahindra, which reported a 6.4 per cent fall in January-March net profit, ended down 5.5 per cent at Rs 606.
Sun Pharmaceuticals weakened by 5 per cent to Rs 1,384 after the company said it received a notice from the Israel-based Taro Pharma for termination of its merger agreement. Ambuja Cements ended down 6 per cent at Rs 98.