Headline indices the Sensex and the Nifty ended in the red, snapping the winning streak of the last six consecutive sessions as investors turned cautious after the uninspiring quarterly earnings of some heavyweights.
Mixed global cues also weighed on sentiment as concerns over rate hikes and a recession persisted. The US FOMC outcome is due on Wednesday, July 27 which will be the biggest near-term trigger for the market.
Sensex ended 306 points, or 0.55%, lower at 55,766.22 while the Nifty closed the day with a loss of 88 points, or 0.53% at 16,631.
Some 13 stocks ended in the green while 17 stocks ended in the red in the Sensex index. Shares of Tata Steel (up 2.66%), IndusInd Bank (1.99%) and Asian Paints (up 1.25%) ended as the top gainers in the Sensex index while those of Mahindra & Mahindra (M&M) (down 3.80%), Reliance Industries (RIL) (down 3.31%) and Maruti (down 2.41%) ended as the top laggards.
BSE Midcap index closed almost flat (up 0.03%) while the BSE Smallcap indices ended with a minor loss of 0.13%. Among the sectoral indices, BSE Metal rose 1.50% while the Auto index fell 1.69%. Energy, Oil & Gas and Healthcare indices fell up to a percent.
"Fears of global economic slowdown along with the reaction to a slew of major quarterly earnings dictated the trend in the domestic market. Recession fears are casting a shadow over the global markets as the US and Euro business activity contracted unexpectedly owing to the downturn in the manufacturing and service sectors. The major market driver this week will be the Fed’s policy decision on Wednesday, where it is expected to hike rates by 75bps," said Vinod Nair, Head of Research at Geojit Financial Services.
Even as the market ended in the red, as many as 122 stocks, including ITC, Adani Enterprises, Blue Dart Express, Elecon Engineering and Gujarat Fluorochemicals, hit their 52-week highs in intraday trade on BSE.
On the technical front, Nifty formed a small 'Doji' candle on the daily chart which indicates indecisiveness.
As per Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, 16,600 would be the key level to watch out for and below the same, the index could slip to 16,500-16,475 levels. A fresh uptrend rally is possible only after the breakout of 16,700 and above the same, the index could rally up to 16,780-16,850.
Crude oil prices inched up as the Brent Crude traded near the $105 barrel mark while the rupee rose 12 paise to close at 79.74, as per Bloomberg data.
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