Foreign portfolio investors turning net sellers, slumping car sales which marked sharpest decline in 18 years, realty sector also facing headwinds with NBFC crisis on, led to market sentiments turning negative on Wednesday.
Sensex fell 193.35 points or 0.48 per cent to close at 39,756.81 while the broader Nifty-50 fell 59.40 points or 0.50 per cent closing at 11,906.20 points.
It was a volatile day yet again with Sensex touching a high of 39,982.10 and then falling to a low of 39,623.53 in intra-day trading.
In the broader market BSE Mid-Cap fell 0.79 per cent reversing the previous day's gain while Small-Cap fell 0.48 per cent.
The advance-decline ratio on BSE worsened with 1522 stocks losing and only 998 stocks advancing.
Among the sectoral indices BSE Realty index was the top loser at 1.94 per cent, other sectoral losers included Auto (-1.11 per cent), Bankex (-1.01 per cent), Capital Goods (-1.15 per cent) and Telecom (-1.55 per cent). Only two sector closed in the green Metal (0.48 per cent) and FMCG (0.01 per cent).
Among the top losers in the Sensex index were Yes Bank (-3.34 per cent), Maruti (-1.79 per cent), Kotak Bank (1.65 per cent), Hero MotoCorp (1.55 per cent), Bajaj Auto (1.38 per cent) and IndusInd Bank (1.23 per cent).
Foreign portfolio were turned net sellers of equities worth Rs 1,050.43 crore while the domestic institutions were net buyers by Rs 271.15 crore.
Nagaraj Shetti, Senior Technical & Derivative Analyst, HDFC Securities said, "The Nifty is currently facing stiff resistance around 12,100 levels, there is a possibility of follow-through weakness in the next session."
"The Nifty was not able to continue with upside momentum and slipped into weakness on Wednessday. Technically, this pattern indicates a bearish pattern. Normally, such patterns are formed near top reversals. But we need confirmation of further negative closing to call this pattern as a trend reversal (top reversal)," Shetti said.
Sneha Seth, Derivatives Analyst, Angel Broking said, "After three consecutive sessions winning streak, the benchmark index concluded the day in red. At current juncture, 11,800-11,850 is an immediate base for the Nifty-50; whereas, resistance is placed around 12,000-12,050."
Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas said, "Indian Indices traded on a negative note giving a halt to a 3 day rally. Investors remained cautious ahead of key macro data such as CPI inflation for May and IIP growth for April."
Vinod Nair, head of Research, Geojit Financial Services said, "The market retreated the winning streak as headwinds from the global markets and concerns that CPI inflation may rise to seven months high in May impacted the momentum. Further, a steep fall of 21 per cent in passenger vehicle sales added fuel to investors' concerns over demand and liquidity crunch with NBFCs."