Caution-selling ahead of the upcoming railway budget and derivatives expiry, depressed the Indian equity markets during the mid-afternoon trade session on Wednesday.
Consequently, the barometer 30-scrip sensitive index (Sensex) of the BSE receded by 193 points, or 0.82 percent.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) traded in the red. It was lower by 45 points, or 0.63 percent, at 7,064.55 points.
The Sensex, which opened at 23,332.94 points, was trading at 23,217.20 points (2.30 p.m.) -- down 192.98 points, or 0.82 percent from the previous day's close at 23,410.18 points.
During the intra-day trade, the Sensex touched a high of 23,338.89 points and a low of 23,140.17 points.
The BSE market breadth was heavily tilted towards the bears -- with 1,559 declines and 879 advances.
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Initially, the key indices of the Indian equity markets opened on a negative note in-sync with their Asian peers and Tuesday's lower close at the US indices.
Caution-selling, just a day ahead of the railway budget and F&O (futures and options) expiry dragged the equity markets lower.
Besides, investors' confidence was eroded by the continuing conflict between the ruling NDA (National Democratic Alliance) and the opposition, which is seen as having a bearing on some key economic legislations that await parliamentary approval.
The government is desirous of pushing through major economic legislations like bankruptcy code and Goods and Services Tax (GST) Bill during the ongoing Budget session.
In addition, softening of crude oil prices which declined by 1.72 percent to $31.33 and negative global markets, deterred investors to chase stock prices higher.
Moreover, caution prevailed over the upcoming G20 finance ministers' meet in Shanghai, China.
However, the markets rose briefly on the back of strengthening rupee ans short-covering, value buying which were triggered by budgetary expectations.
Despite opening on a weak note at 68.63 to a US dollar from its previous close of 68.59 to a greenback.
The rupee strengthened in the later part of the day's trade.
Further, value-buying and short-coverings which were triggered on hopes of positive budgetary announcements swelled the equity markets.
Market participants hoped that the central government may increase expenditure, announce tax concessions and pave the way to reduce the NPAs (non-performing assets) levels of the banking sector.
Notwithstanding the brief uptrend, the equity markets again plunged on the back of cation-selling.
"Softening of crude oil prices, political tensions and upcoming railway budget and F&O expiry dragged the markets lower," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"However, the markets stabilised briefly as a strengthening rupee, value buying and shor-coverings restored investors risk taking appetite."
Nitasha Shankar, vice president for research with YES Securities, pointed out that
headline index Nifty struggled to hold on to key support levels leading to sharp corrections.
"Broader markets, however, marginally outperformed the headline indices. All major indices traded in the red barring the energy and the PSU bank index," Shankar noted.