REUTERS - India's stock markets saw volatile trade on Wednesday as wary investors shied away from risky bets on fears that a rate cut in China was not enough to stabilise its slowing economy or halt a collapse in stocks.
Chinese markets were unimpressed with the central bank's strong monetary easing measures announced on Tuesday night, believing much more official support is needed, and traders said shares remained vulnerable to another selloff.
Indian stocks are expected to remain volatile ahead of the August derivatives contracts expiry on Thursday.
"People are confused, it shatters the confidence. After a massive earthquake, you feel tremors for a few days," said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.
The benchmark BSE Sensex was down 0.6 percent, after having fallen as much as 1.3 percent in early trade.
The broader Nifty was down 0.45 percent, having fallen as much as 1.2 percent earlier to 7785.60 points.
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Declines in financial, consumer, health and telecom stocks outweighed gains in IT and resources stocks.
Falls of around 2 percent in bank stocks such as ICICI Bank , State Bank of India and Axis Bank weighed on the NSE index.
ITC was down 0.56 percent while Hindustan Unilever lost 0.58 percent.
Industrial stocks Larsen & Toubro fell 0.5 percent while BHEL was down 1.6 percent.
IT stocks Tata Consultancy Services and Wipro
NSE heavyweight Reliance was up 2 percent while Coal India gained 1.1 percent.
Despite the volatility many brokerages advised investors to look for 'bottom-up' investing ideas on optimism that India remains in a sweet spot compared to its peers led by to a fall in commodity prices.
(Reporting by Karen Rebelo in Mumbai; Editing by Sunil Nair)