Investors were seen reluctant to chase prices on the back of speculation over a curtailment of stimulus measures by the European Central Bank (ECB).
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down by 25.20 points, or 0.29%, to 8,743.95 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,425.74 points, closed at 28,220.98 points - down 113.57 points, or 0.40%, from the previous close at 28,334.55 points.
The Sensex touched a high of 28,477.65 points and a low of 28,188.90 points during the intra-day trade. In contrast, the BSE market breadth was tilted in favour of the bulls – with 1,743 advances and 1,133 declines.
On Tuesday, both the key Indian indices ended in the green due to short covering and value buying on the back of positive global cues, and reduction in a key lending rate by the Reserve Bank of India (RBI).
The barometer index had gained 91.26 points, or 0.32%, while the NSE Nifty rose by 31.05 points, or 0.36%.
Initially yesterday, the benchmark indices opened on a higher note in sync with their Asian peers. Besides, the announcement made on Tuesday by the newly-constituted Monetary Policy Committee (MPC), headed by RBI governor Urjit Patel, to cut a key lending rate by 25 basis points provided some boost to the domestic markets.
In addition, the markets were provided a relief by the International Monetary Fund (IMF) forecast of India’s growth to be raised by 0.2 percentage points to 7.6% for 2016-17 and 2017-18.
However, disappointing macro-data, which showed that India’s private sector economy lost momentum in September, hampered the risk-taking appetite.
While the Nikkei Markit India Composite PMI (Purchasing Managers’ Index) Output Index declined to 52.4, the seasonally adjusted Nikkei India Services Business Activity Index, too, registered a slower rate of expansion at 52 in September. In addition, the global markets, especially the European markets remained subdued over speculation on curtailment of stimulus measures by the ECB.
Further, profit booking and a depreciation in the rupee also added to the downward trajectory.
The Indian rupee weakened by three paise to 66.50 against a US dollar from its previous close of 66.47 to a greenback.
“Investors were seen reluctant to chase prices after several days of rise,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
“Negative European markets and disappointing Services PMI figure, too, dragged the key indices lower.”
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with sideways to bearish sentiments throughout the session on profit booking at higher levels.
“Oil-gas and aviation stocks traded down in the second half of the session on profit booking at higher levels from traders. FMCG, power and cement stocks managed to hold the early gains throughout the session on fresh buying support.”
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