Caution over the ongoing results season, weak global cues, dwindling rupee value coupled with reduced chances of a lending rate cut depressed investors and led to a barometer index of the Indian equities to shed 58 points on Tuesday.
Both the Indian bellwether indices had opened lower due to negative import-export data coming out of China. Even the healthy domestic macro data points released a day earlier were not able to arrest the slide in the day's trade.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed marginally in the red. It was lower by 12 points or 0.15 percent at 8,131.70 points.
The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), which opened at 26,874.29 points, closed at 26,846.53 points -- 57.58 points or 0.21 percent down from its previous close at 26,904.11 points.
The Sensex touched a high of 26,918.52 points and a low of 26,719.10 points during the intra-day trade.
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The barometer index closed on Monday with a loss of 175 points or 0.65 percent.
Analysts pointed out that investors were reluctant to chase higher prices due to the uncertainty over the second quarter results which, they fear, might turn out to be below expectations due to currency fluctuations and slowing demand scenario.
"The negative Chinese markets due to sliding import-export data had an initial impact on the Indian indices," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
Chinese exports during last month fell by 3.7 percent and imports receded by 20.4 percent. The 11-straight month of downfall in imports impacted commodity stocks world wide.
"The investors were seen reluctant to chase prices as caution grew over the ongoing results season," James said.
Global software major Infosys was the first bluechip to come out with its results on Monday. It dampened the markets with a weak guidance on revenue growth.
"Other factors that dampened sentiments were speculations that the country's central bank might not ease monetary policy in the remaining part of the calendar year due to the latest factory output and inflation data points which were released on Monday," James added.
The Index of Industrial Production (IIP) data for August grew the fastest in the last three years accelerating to 6.4 percent in August, from 4.1 percent in the month before.
Retail inflation for September, based on the consumer price index (CPI), increased to 4.41 percent -- from 3.74 percent recorded for the previous month.
This led economists and analysts to predict that the Reserve Bank of India (RBI) will maintain a status quo in key lending rates for the rest of the calendar year.
Furthermore, the Indian rupee came under pressure, it closed the day's trade down 44 paise at 65.19 (65.1825) to a US dollar from its previous close at 64.75 to a greenback.
The domestic institutional investors (DIIs) were net sellers in the day's trade.
According to data with stock exchanges, the DIIs sold stocks worth Rs.273.51 crore and the foreign institutional investors (FIIs) bought stock worth Rs.272.61 crore in the day's trade.
Nitasha Shankar, vice president, research with YES Securities, told IANS: "Benchmark index (Nifty) recouped its losses to end marginally down, after taking support at the lower end of the range."
"Small cap and midcap indices ended with marginal gains outperforming the headline index. Metal stocks came under pressure after a significant rally; IT stocks continued to witness selling."
Sector-wise, information technology (IT), technology, entertainment and media (Teck), oil and gas, banking and capital goods stocks came under intense selling pressure.
However, realty, fast moving consumer goods and metal scrip managed to stay afloat.
The S&P BSE IT index plunged by 116.07 points, Teck index receded by 53.31 points, oil and gas index fell by 51.15 points, banking index declined by 37.26 points, and capital goods index was lower by 32.58 points.
The S&P BSE realty index increased by 18.51, fast moving consumer goods (FMCG) index gained 11.14 points and metals index inched up by 6.31 points.
Major Sensex gainers during Tuesday's trade were: Coal India, up 1.79 percent at Rs.340.50; Bajaj Auto, up 1.46 percent at Rs.2,460.75; BHEL, up 1.39 percent at Rs.208.45; Maruti Suzuki, up 1.02 percent at Rs.4,275.35; and ITC, up 0.98 percent at Rs.344.05.
The major Sensex losers were: ONGC down 3.49 percent at Rs.254.25; Hindalco Industries, down 2.99 percent at Rs.86; Vedanta, down 2.80 percent at Rs.107.75; Tata Steel, down 2.37 percent at Rs.245.20; and Infosys, down 2.12 percent at Rs.1,098.65.
