After a massive rally on Monday, the market witnessed profit-taking at higher levels due to nervousness amongst market participants ahead of the actual election results.
The Nifty claiming 11,l883 and Sensex 39571 marked the day with all the bullishness summoned up from yesterday's gains but selling emerged at higher levels.
The Sensex lost 382 points to close at 38,969, while the Nifty ended with losses of 119 points or 1 per cent at 11,709 levels.
The broader market outperformed the benchmark with BSE Mid-Cap and Small-Cap ending with losses of 0.9 per cent and 0.6 per cent respectively.
Amongst the sectoral indices, except consumer durables which ended with gains of 0.7 per cent, all the other sector indices ended in red with Auto, Banking and Metal being the top losers.
Major Asian markets have closed on a mixed note. European indices like FTSE, DAX and CAC were trading in the green. The rupee weakened marginally after the rise seen on Monday.
"Technically, while the Nifty has corrected, the underlying trend remains up. Further upsides are likely once the immediate resistances of 11,857-11,884 are taken out. Crucial supports to watch for any weakness are at 11,682-11,657," said Deepak Jasani, Head of Retail Research, HDFC securities.
According to analysts, this is a classic piercing line pattern formed on the key indices such as the Nifty, Bank Nifty and Sensex followed by other sectoral indices. The bulls got trapped as the exaggeration soon disappeared with profit booking. A close below previous day's midpoint also made sure that any upside would be seriously thought on