Benchmark indices Sensex and Nifty took a pause after a four-session record run on Wednesday, as higher bank NPAs in ongoing quarterly results weighed on banking stocks coupled with a caution ahead of US-China trade deal.
At the closing bell, the BSE gauge Sensex was down 79.90 points, or 0.19 per cent, at 41,872.73; while the NSE barometer Nifty was 19 points, or 0.15 per cent, lower at 12,343.30.
Both indices -- Sensex and Nifty -- had closed at their life-time high levels for the second day in a row on Tuesday.
IndusInd Bank was the top loser in the Sensex pack, dropping 5.44 per cent. Other major laggards were Infosys, SBI, PowerGrid, Tech Mahindra, Bharti Airtel and HDFC Bank.
In contrast, Hero MotoCorp, Titan, Maruti, Asian Paints, M&M, TCS, Bajaj Auto and Ultratech Cement closed on the winning side.
Sectorally, BSE bankex, finance, telecom, energy and teck indices fell up to 0.70 per cent.
On the other hand, consumer durables, realty, auto, utilities, metal and healthcare indices rose up to 1.37 per cent.
In the broader market, BSE midcap and smallcap indices outperformed benchmarks, rallying up to 1.04 per cent.
Analysts are of the view that overall market sentiment was also affected by comments from a top US official that the trade truce with China, set to be signed on Wednesday, does not include a deal to roll back tariffs imposed on most Chinese goods.
Vinod Nair, Head of Research, Geojit Financial Services Ltd, said, "After the solid pre-budget rally, market is getting a bit sceptical post higher than expected NPA numbers in the recent Q3 banks results and very high consumer inflation which may stay for another month or two. Market would watch the Q3 results & actual budget, for further direction."
Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a negative note, while exchanges in Europe were off to a tepid start.
On the currency market front, the Indian rupee settled 5 paise higher at 70.82 per US dollar.
Domestic investors were also concerned about possible stagflation in India due to low growth and high inflation in wake of recently released government data, traders said.
Brent crude oil futures traded 0.33 per cent down at USD 64.28 per barrel.
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