Indian shares pared loses in late afternoon trades with 50-share Nifty index regaining key 5,900 levels on value-buying in metal and other defensive sectors such as pharmaceuticals and FMCG.
Risk appetite, however, remained frail after assembly election results suggest Narendra Modi will be re-elected as chief minister of Gujarat for third time in a row, defeating ruling Congress party coupled with US fiscal woes.
BJP surged ahead of challenger Congress in Gujarat in 109 of 168 seats, with Chief Minister Narendra Modi leading from Maninagar but both state Congress chief and leader of Opposition trailing their rivals. Sources in the state election office said BJP was leading in 109 constituencies, Congress in 61, NCP one and others in four.
At 2PM, the Bombay Stock Exchange's Sensex index fell 11 points and traded at 19,463.24 while the National Stock Exchange's Nifty-50 index declined 13 points at 5,917.60.
Global risk appetite was weak too as deteriorating federal budget negotiations in US fueled concern that automatic tax increases and spending cuts will be triggered.
Asian markets ended mixed. Hong Kong's Hang Seng was up 0.16% to 22,660, Japan's Nikkei fell 1.2% to 10,039 and China's Shanghai Composite was up by 0.3% to 2,168. In Europe, France's CAC fell 0.26% to 3,655, Germany's DAX declined 0.3% to 7,646 and UK's FTSE was flat at 5,962 in early trades.
The MSCI Asia Pacific index outside Japan declined 0.3% to 897.
On the sectoral front, among top losers included real-esate, power, banks, capital goods while metals, FMCG, pharmaceuticals gained on BSE.
Among the Sensex stocks, metal stocks gained with Tata Steel, Jindal Steel and Hindalco rising above 1% each while Cipla and HUL gained 1% while among laggards, Mahindra & Mahindra and Bajaj Auto declined 1.5% and 1.2%, HDFC Bank fell 0.6% and Reliance Industries dropped 0.4% on BSE.
The other key notable movers are BGR Energy Systems which has surged 4% to Rs 274.60 after the company said that it has bagged orders for supply of steam turbine and generators from state owned NTPC for the proposed 2X800 MW super thermal power project at Lara in Chattisgarh. The value of the order is Rs 1,548 crore.
Reliance Power is trading lower by 2% at Rs 96.50 after the company said that the offer for sale (OFS) transaction was completed at a price of Rs 95 per share on a proportionate allocation method.
Opto Circuits (India) has surged 4% to Rs 110 after the board approved issue of warrants to promoter at Rs 145 per share.
The BSE mid-cap and small-cap fell 0.1-0.4%.
The overall breadth remained negative as 1,586 stocks declined while 1,185 stocks advanced on the BSE.