Extending losses for the third consecutive session, the domestic markets ended sharply lower in trade on Wednesday, as investors remained cautious ahead of the conclusion of the US Federal Reserve's meeting later in the day and the expiry of monthly derivatives contracts back home this week.
The S&P BSE Sensex settled the day 204 points down, but managed to maintain its key support level of 27,000, while broader CNX Nifty ended at 8,177.15, down 55.75 points. At one point, the index had fallen below its crucial psychological level of 8,150.
Markets breadth remained fairly negative with 19 of the 30 Sensex stocks ending the day in red.
The slump in the market was led by losses in banking stocks, with S&P BSE BANKEX ending the day 2.53 per cent down.
Axis Bank was the worst performer on both the indices and skidded over 7 per cent as the private lender failed to meet Street expectations for the September quarter earnings.
Among other banking stocks ICICI Bank fell 4 per cent while State Bank of India declined 2.8 per cent at close.
Lupin's disappointing quarterly results on Tuesday continued to weigh on pharmaceutical stocks. Lupin and Dr Reddy's Laboratories fell nearly 2 per cent each.
Although the US Fed is likely to keep interest rates unchanged this week, investors are looking forward for clues as to the timing of a widely expected rate hike.
Markets will react to the news on Thursday, the same day when monthly derivatives contracts expire.
"Getting some clarity from the Fed on rates could give the markets some bounce," G Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm said.
Among Asian markets, China's Shanghai Composite dipped 1.72 per cent at close, Hong Kong's Hang Seng fell 0.87 per cent and South Korea's Kospi dropped 0.3 per cent. Nikkei bucked the trend and settled the day 0.67 per cent up on bargain hunting following the previous day's fall.
Overnight, US stocks ended lower as the investors booked profits ahead of FOMC rate decision and Federal Reserve commentary. Disappointing Durable Goods orders, which declined by 1.2% in September and decline in US Consumer Confidence to 97.6 also added to the negative sentiment.
Lowdown on markets today:
At 03:00 pm
Sensex at 26,961.21, down 292.23 points
Nifty at 8,146.35, down 86.55 points
At 01:35 pm
Sensex at 27,014.18, down 239.26 points
Nifty at 8,165.45, down 67.45 points
At 12:10 pm
Sensex at 27,092.70, down 160.74 points
Nifty at 8,191.45, down 41.45 points
At 11:10 am
Sensex at 27126.60, down 126 points
Nifty at 8197.30, down 35 points
At 9:30 am
Sensex at 27,136.71, down 116.73 points
Nifty at 8,200.05, down 32.85 points
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