In a climb-down from its 4-month high, the Sensex today took its first hit in five sessions by falling over 104 points even as the Nifty slipped below the 8,800-mark, pulled down by rate-sensitive banking, realty and other stocks ahead of the RBI monetary policy.
Investors were anxious concerned about uncertainties over the timing of Federal Reserve rate hike, US policies under President Donald Trump, the upcoming French election and rising oil price that could stoke inflation, going ahead. A weak closing in Asia reflecting overnight losses in the US owing to all these unknowns triggered selling.
The rupee lost 19 paise against the dollar to 67.41, which precipitated the fall.
The 30-share barometer opened a shade higher and rose further before profit-booking kicked in, but settled at 28,335.16, down 104.12 points, or 0.37 per cent.
Over the past four sessions, the index had rallied 783.32 points.
The 50-share NSE Nifty broke below the crucial 8,800 level and settled lower by 32.75 points, or 0.37 per cent, at 8,768.30. Intra-day, it traded between 8,809.30 and 8,741.05.
"Market has fallen today as consensus of 25 bps rate cut is largely factored in. Investors are stepping back due to the uncertainty over FOMC rate hike, US policies, rising crude price which could impact inflation and rupee movement which consequently cast a shadow over the future RBI decision," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.
The upmove in the last four sessions mostly came on the back of a series of market-friendly budgetary proposals and expectations that RBI would reduce the policy rate at its policy meet tomorrow.
In the 30-share Sensex heatmap, 20 ended with losses and 10 turned higher. A lower opening in Europe completed the picture.
Tata Motors slid the most (3.52 per cent), followed by Coal India (2.88 per cent). Others such as ONGC, Adani Ports, Lupin, GAIL, Dr Reddy's, RIL and Axis Bank added to the fall.
Infosys, L&T, Maruti Suzuki, Asian Paints, HDFC and ITC, among others, rose, keeping the fall limited.
The BSE metal index took the biggest knock, down 1.25 per cent, followed by auto, oil and gas and healthcare.
In line with overall trend, the broader markets ended in negative zone, with the mid-cap index down 0.18 per cent and small-cap 0.09 per cent.
The scrip of rating agency Icra today zoomed 5.96 per cent to Rs 4,336.45 after the company said its board will meet later this week to consider a proposal for buyback of shares.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 449.52 crore yesterday, as per provisional data.
Shanghai Composite closed 0.12 per cent lower while Japan's Nikkei was down 0.35 per cent and Hong Kong shed 0.07 per cent.
European shares were trading lower before the ECB meeting. Key indices in France, Germany and UK fell by up to 0.30 per cent.
The market breadth turned negative as 1,561 shares
ended lower, 1,324 advanced, while 121 went flat. The total turnover fell to Rs 3,387.26 crore, from Rs 4,037.41 crore yesterday.
"Tepid Asian markets dampened investor sentiment as reports emerged that China's foreign exchange reserves had fallen for a seventh month," said Karthikraj Lakshmanan, Senior Fund Manager, Equities, BNP Paribas Mutual Fund.
