Caution ahead of the quarterly results season, along with relentless selling by foreign funds, caused a slump in the Indian equity markets on Thursday.
Consequently, key indices of the Indian equity markets ended the day's trade in the red.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) declined by 68 points or 0.89 percent, to 7,546.45 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 24,998.79 points, ended at 24,685.42 points -- down 215.21 points or 0.86 percent from the previous close at 24,900.63 points.
The Sensex touched a high of 25,013.13 points and a low of 24,647.48 points during the intra-day trade.
The BSE market breadth was tilted in favour of bears -- with 1,443 declines and 1,124 advances.
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The barometer index had closed flat on Wednesday. It ended up a mere 17.04 points or 0.07 percent, while the Nifty inched up by just 11.15 points or 0.15 percent.
On Thursday, both the key indices opened on a firm note, on the back of a rebound in global crude oil prices and Wednesday's positive close to the US markets.
However, the initial gains were ceded as selling and unwinding of long positions ahead of the fourth quarter (Q4) results season dented sentiments.
The Q4 results season is scheduled to start from April 8. Infosys is expected to be the first blue chip to come out with its results on April 15.
Besides, selling by foreign institutional investors (FIIs) eroded investors' confidence.
Data with stock exchanges showed that FIIs sold stocks worth Rs.1,294.35 crore in the last two sessions.
On the other hand, positive cues from the FOMC (Federal Open Market Committee) minutes released late on Wednesday evening and a rebound in global crude oil prices helped pare some of the losses.
The FOMC minutes disclosed that the US Federal Reserve has taken a cautious stand on future rate hikes. A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.
"Caution ahead of the earning results season and the relentless selling by the FIIs pulled the equity markets lower in the day's trade," Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.
"The FOMC minutes and a rebound in global crude oil prices helped pare some losses."
Vaibhav Agarwal, vice president and research head at Angel Broking, cited: "With the results season beginning this week, earnings growth would be a key trigger for the markets over the coming days."
"Meanwhile, we expect markets to continue to react to global cues which could remain volatile considering the FOMC meeting later this month."
Nitasha Shankar, senior vice president for research with YES Securities informed that Indian markets resumed correction following a day of pause, indicating weakening uptrend.
"Broader markets underperformed the headline indices. Midcap and smallcap indices ended with cuts of 0.9 percent and 0.7 percent respectively," Shankar noted.
"All major indices barring the pharma index ended in the red. Media, IT (information technology), auto and FMCG (fast moving consumer goods) indices were worst performers with declines in excess of one percent."
Both, the foreign institutional investors (FIIs) and domestic institutional investors (DIIs) were net sellers during the day's trade.
Data with stock exchanges showed that FIIs sold stocks worth Rs.294.72 crore, and the DIIs divested scrip worth Rs.16.06 crore.
Sector-wise, healthy buying was witnessed in stocks of healthcare, energy, and oil and gas, whereas scrip of consumer durables, automobile and capital goods came under selling pressure.
The S&P BSE healthcare index increased by 86.68 points, followed by the energy index, which gained by 14.19 points; and the oil and gas index rose by 11.40 points.
However, the S&P BSE consumer durables index plunged by 237.09 points, followed by the automobile index, which receded by 206.23 points; and the capital goods index declined by 151.19 points.
Major Sensex gainers during the day's trade were BHEL, up 4.65 percent at Rs.119.30; Coal India, up 1.94 percent at Rs.281.10; Lupin, up 1.41 percent at Rs.1,506.55; Dr.Reddy's Lab, up 1.05 percent at Rs.3,031.40; and ONGC, up 0.97 percent at Rs.207.80.
Major Sensex losers during the day's trade were Adani Ports, down 3.36 percent at Rs.217.10; Maruti Suzuki, down 2.81 percent at Rs.3,471.35; HDFC, down 2.58 percent at Rs.1,072.65; Larsen and Toubro (L&T), down 2.24 percent at Rs.1,182.50; and ITC, down 1.99 percent at Rs.319.60.