Market rally loses steam, Sensex down 80pts

After having spent most of the day in the negative, stocks declined on Wednesday and ended marginally lower as weakness in the global markets rubbed off on the bourses. The BSE Sensex ended at 16,446, down 78 points and the S&P CNX Nifty ended at 4,946, down 25 points.

Earlier in the day, the Nifty had reclaimed the 5,000 mark and touched a high of 5,006 in opening trades, before having slipped into the red shortly after. The BSE benchmark index had touched a high of 16,663 and a low of 16,367.

In Asia, investors once again turned to the sidelines as details about efforts of the Euro-zone policy makers remained murky. The markets witnessed edgy trades and eventually ended mixed on hopes that the eurozone leaders have edged closer to a solution to the region's debt crisis. Japan’s Nikkei Stock Average advanced 0.1%, the Hang Seng and Shanghai Composite indices slipped 1% each.

Meanwhile, the European markets rallied after having opened flat. The CAC 40 index is at 3,040, up 0.5%, FTSE is at 5,312, up 0.3% and the DAX is at 5,695, up 1.2%.

Back home, the sectoral indices BSE Capital Goods and Metal led the losses, having shed nearly 2% each.

BSE Metal witnessed profit booking seeping in after the rally on Monday. Yesterday, the markets had rallied on hopes that leveraging the European Financial Stability Facility will help the struggling European nations avert debt default for which countries would have to vote.

Extending Tuesday's losses, JSW Steel shed nearly 7% to Rs 570 on reports that a crunch in iron ore supply is expected to force it to shut its Vijaynagar plant in the Bellary district of Karnataka.

Tata Steel, Sesa Goa, Hindalco Industries,Jindal Steel and SAIL, down 2-3% each, were the other prominent losers from the Metals' space.

Larsen & Toubro, ICICI Bank and Bharti Airtel dragged the Sensex down for the day. They accounted for a 68 point loss to the BSE benchmark index.

DLF, ITC, NTPC, ONGC and Infosys, up nearly 1-3% each, were the prominent gainers on the Sensex.

Among individual stocks, State-run NMDC gained nearly 1% at Rs 228 after having announced, today, that it will sign an agreement with Russia's Severstal by December to set up a three million tonnes per annum steel plant in Karnataka under a 50:50 joint venture.

State-run NTPC also gained nearly 2% at Rs 168 after having tied up a syndicated loan worth Rs 2,341 crore from a consortium of Indian banks for its 390-MW Muzaffarpur thermal power project in Bihar.

The overall market breadth was negative as 1,759 stocks declined against 1,045 advancing ones, on the Bombay Stock Exchange.