Caution ruled ahead of the derivatives expiry and alongside of the parleys to resolve the Greek debt crisis, a benchmark index of the Indian equities market closing 75 points in the red at the end of trading on Wednesday.
The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed 74.70 points or 0.27 percent down at the end of trade session.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also slipped and closed in the red after the day's trade. It lost 20.70 points or 0.25 percent at 8,360.85 points.
The Sensex of the S&P BSE, which opened at 27,852.32 points, closed the day's trade at 27,729.67 points, down 74.70 points or 0.27 percent from the previous day's close at 27,804.37 points.
The Sensex touched a high of 27,948.24 points and a low of 27,647.29 points in the intra-day trade.
According to analysts, the markets remained choppy in the morning session but traded mainly with a positive bias on the back of improved technical conditions.
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However, the decision of the creditors to reject Greece's new proposal for a debt deal took a toll on the markets.
"Markets opened on a higher note but sharply fell in late trade, snapping eight-day of continued gains on the back of looming Greece debt crisis. International creditors have rejected Greek proposals on the debt issue," said Gaurav Jain, director with the Hem Securities.
The ongoing parleys to resolve the Greece debt crisis assumes significance as the deadline for Greece to make debt payments to the International Monetary Fund is scheduled for June 30.
On June 4, Greece deferred a payment of 300 million euros that was due to be paid to the IMF.
"Volatility increased on account of penultimate day of June derivatives contracts," Jain added.
The F&O (Future and Options) derivatives expiry is scheduled for June 25.
"To continue the recent rally, markets need to see positive (Foreign Portfolio Investors) inflows, government spending and lower interest rate. We can hope that as Greek concern is diminished over this month-end, FPIs are likely to come back," said Vinod Nair, head of fundamental research with Geojit BNP Paribas Financial Services.
The FPIs sold equities worth Rs.374.97 crore during the previous day.
Nair added that if the monsoon continues to be good, a rate cut can be expected by the next Reserve Bank of India (RBI) policy meet.
The meteorological department has forecast that the June rainfall was likely to end with a 16 percent surplus over the long period average.
The Indian markets rose for an eighth consecutive session on Tuesday, as good monsoon and signs of a potential breakthrough in debt talks between Greece and its international creditors helped keep investors' sentiments buoyed.
During the intra-day trade on Wednesday, however, heavy selling was observed in automobile, metal, capital goods, oil and gas and bank sectors.
Stocks of healthcare and fast moving consumer goods (FMCG) saw healthy buying.
The S&P BSE automobile index receded by 150.70 points, metal index declined by 149.09 points, capital goods index lost by 99.73 points, oil and gas index fell by 90.23 points, and bank index was lower by 44.21 points.
However, the S&P BSE healthcare index gained by 115.36 points and FMCG index was higher by 27.09 points.
The major Sensex gainers in Wednesday's trade were: BHEL, up 4.06 percent at Rs.253.95; Hindustan Unilever, up 2.40 points at Rs.895.30; Lupin, up 1.83 percent at Rs.1,805.15; Sun Pharma, up 1.54 percent at Rs.870.80; and Wipro, up 1.34 percent at Rs.565.30.
The major Sensex losers were: Hindalco Inds, down 3.70 percent at Rs.117.15; Tata Steel, down 2.98 percent at Rs.304.10; Mahindra and Mahindra, down 2.27 percent at Rs.1,303.35; State Bank of India (SBI), down 1.92 percent at Rs.262.50; and NTPC, down 1.65 percent at Rs.136.85.
Among the Asian markets, Japan's Nikkei closed higher by 0.28 percent, China's Shanghai Composite Index gained by 2.48 percent, while Hong Kong's Hang Seng was up by 0.26 percent.
In Europe, the London FTSE 100 index rose by 0.35 percent, the French CAC 40 lost 0.24 percent and Germany's DAX Index was lower by 0.88 percent at the closing bell here.