According to market observers, high crude oil prices and caution over a likely default by some of the major players in the non-banking financial sector eroded investors’ risk-taking appetite.
On an intra-day basis, heavy selling pressure was witnessed in auto, IT and FMCG counters.
Index-wise, the Nifty50 on the National Stock Exchange closed at 11,053.80 points, lower 13.65 points or 0.12 per cent from its previous close.
The BSE Sensex, which had opened at 36,936.64 points, closed at 36,542.27 points, down 109.79 points or 0.30 per cent from its previous close of 36,652.06 points.
It touched an intra-day high of 36,938.74 points and a low of 36,357.93 points.
“Investors adopted a note of caution as they awaited cues from a US Federal Reserve meeting that ends later in the global day. Additionally, concerns about continuing trade tensions lingered, capping intermittent flickers of upside momentum,” said Abhijeet Dey, Senior Fund Manager for Equities at BNP Paribas Mutual Fund.
Vinod Nair, Head of Research, Geojit Financial Services said: “Worries over liquidity issues in NBFC space demoralised investors in domestic markets.”
“Market stays on a cautious sentiment ahead of Fed policy outcome and higher oil price as major OPEC producers declined to increase the output. Volatility in global markets is likely to remain elevated in the short term given cancellation of trade talks between US and China.”
Accordingly, a rate hike by the US Fed can potentially drive away foreign funds from emerging markets such as India.
On the currency front, the Indian rupee closed at 72.61 per US dollar, weaker eight paise from its previous close of 72.69 per greenback.
Investment-wise, provisional data with the exchanges showed that foreign institutional investors sold stocks worth Rs 809.95 crore and domestic institutional investors bought stocks worth Rs 1,555.44 crore.
The top Sensex gainers were: Vedanta, up 4.70 per cent at Rs 241.55; Yes Bank, up 1.73 per cent at Rs 223.65; Relaince, up 1.72 per cent at Rs 1,251.75; Tata Steel, up 1.52 per cent at Rs 609.05; and Larsen and Tubro, up 1.05 per cent at Rs 1,332.70 per share.
On the other hand, major Sensex losers were: Tata Motors(DVR), down 3.29 per cent at Rs 123.30; Tata Motors, down 3.15 per cent at Rs 233.30; Wipro, down 2.91 per cent at Rs 319.90; ITC, down 2.67 per cent at Rs 293.00 and State Bank of India, down 2.31 per cent at Rs 264.00 per share.