The eight-day winning streak of the domestic market benchmarks ended on December 2 as investors turned to profit booking in absence of a fresh positive trigger.
The market ended lower mirroring weak global sentiment ahead of US payroll data that could give more cues on a possible shift in the US Federal Reserve's rate-hike trajectory.
Analysts were expecting the market to see some profit booking after the recent gains which ballooned market valuation even as concerns over a recession in the US, rate hikes and geopolitical tensions persist.
Sensex opened 306 points lower at 62,978.58 and fell 605 points to hit the intraday low level of 62,679.63.
The index closed 416 points, or 0.66 percent, lower at 62,868.50 while the Nifty closed at 18,696.10, down 116 points, or 0.62 percent.
Mid and smallcaps outperformed the benchmarks strongly. The BSE Midcap index clocked a gain of 0.80 percent while the Smallcap index rose 0.70 percent.
Amol Athawale, Deputy Vice-President - Technical Research, Kotak Securities said as the market was in an overbought zone after the recent upsurge, a correction was due for some time and hence investors booked profit in a trading session marked by weak Asian and European cues.
"The recent GDP numbers and GST collections came in line with expectations, but global newsflow will continue to dictate the market trend going ahead. The two immediate triggers - RBI's credit policy next week and the US Fed meeting in mid-December on the rate front would determine the investors' mood in the near term," said Athawale.
Shares of Dr Reddy's Labs, Tata Steel and Tech Mahindra ended as the top gainer stocks in the Sensex index. On the other hand, Mahindra and Mahindra, Hindustan Unilever, Maruti Suzuki and Nestle ended as the top laggards in the Sensex pack.
Most sectoral indices ended in the red, with Nifty Auto falling more than a percent. Nifty Media, on the other hand, rose 1.22 percent. Nifty Realty also rose almost a percent while Metal and PSU Bank indices rose about half a percent each.
Crude oil prices were slightly unstable as hopes of a further easing of Covid-curbs supported prices but the dollar's rise capped the gains.
The rupee slipped 10 paise to settle at 81.32 per dollar.
"Indications are in favour of further consolidation in the index but the tone would remain positive till Nifty upholds 18,300. And, since all the sectors are participating in the move, traders should utilise this phase to add quality names on dips," said Ajit Mishra, VP of Technical Research at Religare Broking.
Technical views by experts
Rupak De, Senior Technical Analyst at LKP Securities observed that bears remained at the helm throughout the day as the benchmark index couldn't pare the morning loss. However, the correction was limited by the end of the session.
"Over the near term, sentiment is likely to remain sideways, with 18,500-18,800 to be the crucial range. A decisive breakout from either band may induce a clean directional move in the market," said De.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.