Negative macro economic data coupled with a bearish outlook by the Reserve Bank of India (RBI) and an impending US rate hike decision subdued Indian equity markets during the late-afternoon trade session on Wednesday.
Initially, both the bellwether indices of the Indian equity markets opened on a firm note following US markets positive close on Tuesday. However, the gains were capped ahead of the release of key US macro data on employment.
Investors were concerned over a slowdown in demand which was indicated by a lacklustre eight core industries (ECI) and purchasing managers index (PMI) data.
Even a bearish outlook by the RBI regarding scheduled cuts in key lending rates depressed sentiments.
The barometer sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) declined by 63 points or 0.24 percent.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading in the red. It was lower by 27 points or 0.34 percent at 7,927.90 points.
The Sensex of the BSE, which opened at 26,239.39 points, was trading at 26,106.19 points (at 2.45 p.m.), down 63.22 points or 0.24 percent from the previous day's close at 26,169.41 points.
The Sensex so far touched a high of 26,256.42 points and a low of 26,041.68 points during the intra-day trade.
Nitasha Shankar, vice president for research with YES Securities said: "Banking stocks witnessed unwinding of long positions dragging the banking index sharply lower. Broader markets also came under selling pressure in line with the headline index."
