Update: Markets lose initial steam, Sensex closes 152 pts down

A late sell-off in banking, capital goods and oil & gas bluechips led the BSE Sensex to reverse initial trends and close 152 points down. The index had jumped over 350 points intra-day after a dovish Federal Reserve stance cooled expectations of an early US rate hike.

Shares of Axis Bank, SBI, ICICI Bank, BHEL, RIL and ITC saw moderate to sharp losses, leading to the BSE index falling for the second straight session.

The 30-share Sensex had risen to a day's high of 28,978.74 in early trade and remained in the green for a major part of the session amid a firming global cues. However, a late sell-off by participants dragged down the Sensex to touch the day's low of 28,411.70 points. It closed with a loss of 152.45 points, or 0.53 per cent, at 28,469.67.

The Sensex had lost 114.26 points on Wednesday in a volatile trade.

The 50-share NSE Nifty ended with a loss of 51.25 points, or 0.59 per cent, to settle at 8,634.65 after touching the day's high of 8,788.20 and a low of 8,614.65.

"Despite positive global cues, equity benchmarks concluded the session with a cut. They failed to capitalise the initial push, which was triggered in response to the US Fed's balanced statement on interest rate hike," said Jayant Manglik, President-retail distribution, Religare Securities.

Sectorwise, the BSE Banking index suffered the most by losing 1.76 per cent, followed by Realty (1.50 per cent), Capital Goods (1 per cent), Oil & Gas (0.68 per cent), FMCG (0.64 per cent) and Power (0.52 per cent).

Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 457.43 crore on Wednesday, according to provisional data released by the stock exchanges.

In Asia, barring Japan, country-specific indices rose in a relief rally as the Federal Reserve, after a closely watched two-day meeting, issued a statement that it had removed a pledge to remain "patient" on raising rates, signaling a possible mid-year rate increase.

However, chief Janet Yellen emphasised that while jobs were picking up, the US economy was more muted than 3 months ago, adding that consumer spending slipped and inflation slowed.