Markets ended lower on Thursday on profit taking at higher levels amid political uncertainty after opposition parties called for a nation-wide bandh on Thursday to protest against the government's decision to open up foreign direct investment in the retail sector.
Political instability following TMC, a key UPA ally's decision to withdraw its support to the government also dampened the sentiments.
The 30-share Sensex ended at 18,349 down 147 points or 0.79% and the 50-share Nifty ended at 5,554 down by 46 points or 0.82%. The Sensex and the Nifty reached an intra-day low of 18,292 levels and 5,535 mark, respectively.
On the global front, the Nikkei average shed 1.6% on Thursday, giving up the previous session's sharp gain, as lacklustre Chinese manufacturing data reinforced concerns over flagging demand in Japan's largest trading partner.
European shares and the euro fell on Thursday after weak Chinese and French data underlined worries about global economic growth, and a promise of extra oil from Saudi Arabia also helped to push crude prices to a six-week low.
European equities opened down 0.6%, helping to keep the MSCI world index 0.7% lower. London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX all opened down and futures prices also pointed to a weak Wall Street open as well.
Back home, the rupee fell to its lowest in nearly a week on Thursday as a key ally of the country's ruling coalition withdrew its support, raising worries the government may roll back key reforms such as the hike in diesel prices.
On the sectoral front, BSE Capital Goods, Metal, Oil & Gas and Power indices plummeted by almost 2% followed by counters like Oil & Gas, Realty, PSU, Banks, Consumer Durable, Healthcare and Auto, all declining between 0.5-1%. However, BSE IT index gained by nearly 1%.
From the Capital Goods space, L&T and BHEL have plunged between 2-3.5% on account of profit booking. BHEL was the top Sensex loser, down over 4%. Capital Goods shares witnessed sharp rally during last few trading sessions.
Index heavyweight Reliance Industries declined by over 3%. Kotak Securities has downgraded Reliance Industries (RIL) to sell recommendation attributing lack of reason for stock's recent run up, it gained 10.3 per cent in the last five trading sessions.
Banking and financial shares like ICICI Bank, SBI and HDFC slipped between 2-3% on account of profit booking. Banking shares witnessed gains during last few trading sessions post the announcement of Monetary Policy where the key rates were kept unchanged whereas the CRR was cut by 1%.
Metals shares like Sterlite, Tata Steel, JSPL and Hindalco declined between 1-3%.
Other notable losers include, GAIL, Coal India, NTPC, Hero Moto, Cipla and M&M.
On the gaining side, shares of information technology (IT) companies were in limelight in an otherwise weak market after the Indian Rupee fell against the US Dollar. A weak rupee boosts revenue of IT firms in rupee terms as major companies earn most of their revenues from software exports. TCS was up by over 1% whereas Infosys and Wipro surged by nearly 1% each.
Other prominent gainers include Bajaj Auto, Bharti Airtel, Maruti Suzuki, ONGC, ITC and HDFC Bank.
Meanwhile, BSE Midcap index slipped by 0.65% whereas BSE Smallcap index dipped by 0.53%.
The market breadth in BSE ended weak with 1,594 shares declining and 1,199 shares advancing.
Amar Remedies ended down over 3% on reports that Dabur has filed a case against the company for violating the intellectual property right of its toothpaste brand Meswak.
Shares of wind-energy major Suzlon Energy were down nearly 4% after the company after market hours Tuesday informed that it is seeking four-month extension of its Zero Coupon foreign currency convertible bonds due October 2012.
Retail shares plunged in trades today after Mamata Banerjee, head of Trinamool Congress withdrew support from the UPA government following the Cabinet Committee on Political Affairs approval for 51% foreign direct investment in multi-brand retail.
Retail stocks such as Provogue (India), Pantaloon Retail, V2 Retail, Brandhouse Retail, Trent and Shoppers Stop ended weaker by 3-7% each.
Shares of HCL Technologies was up 1% after the company today announced that it has signed a multi-year, multi-million IT Infrastructure Management deal with Freescale Semiconductor.