Markets snapped four-day winning streak to end marginally lower, amid a volatile trading session on Wednesday, on profit booking, with software technology shares leading the decline on the back of a stronger rupee.
The 30-share Sensex ended down 15 points at 16,451 and the 50-share Nifty ended down 11 points at 4,956.
The European markets were trading on a subdued note in the mid-morning deals. CAC 40 index was at 3,262, down 8 points, DAX was at 6,336, up 4 points and the FTSE was at 5,680, down 14 points.
The other Asian markets ended the day on a flat note.
The Shanghai Composite index ended lower 1.4% at 2,266 levels. Hang Seng ended higher 0.3% at 19,686 and the Nikkei advanced 1% to close at 8,550 levels.
IT stocks were under the selling pressure after the Indian rupee rose to a two-month high after foreign investors increased their investments in Indian debt and equities.
The index ended lower by over 2% or 122 points at 5,509 points.Infosys ended down 1.9%, TCS slipped 2.6% and Wipro ended down 2.7%.
Metal shares also witnessed profit booking after recent gains on the back of better-than-expected fourth quarter GDP data from China.
Tata Steel was the top loser among the Sensex stocks, down 4% to close Rs 425. Hindustan Zinc, SAIL, NMDC, Sesa Goa, Bhushan Steel and JSW Steel are the top losers from the metal pack.
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Mahindra & Mahindra ended weaker by 2.8% at Rs 686 on reports that the Income Tax Appellate Tribunal has ordered Mahindra Intertrade, a M&M subsidiary, to pay Rs 3.6 crore (Rs 36 million) penalty for concealing income and furnishing inaccurate details about earnings.
Among capital goods shares BHEL and Larsen & Toubro ended down on profit booking after recent gains.
Other losers include Cipla, Sterlite Industries, NTPC, Gail India and Hindustan Unilever.
Index heavyweight Reliance Industries ended higher by nearly 5% at Rs 777 after the company announced buyback plans before the markets opened for trade today.
Deven Choksey, MD and CEO, KR Choksey Securities is of the view that it as a positive move by the company ahead of its third quarter results which are to be announced on Friday.
"This is not an unexpected move. We expect the company to report a weak set of numbers for the December 2011 quarter and this announcement will allow the floor price of the stock to be maintained."
"Going ahead, the stock may see more downside.
Fundamentally, the company is on a strong footing and I suggest that investors buy the stock on a decline and hold for the long-term." adds Choksey.
ONGC was up 2.4% to close at Rs 268 on reports that the state-run oil exploration firm is in talks with US energy firm, ConocoPhillips, to explore possibilities of joining hands for exploration of oil and gas in Indian deep sea and shale gas in North America.
Brigade Enterprises zoomed 8.9% to Rs 63 after Brigade Group announced the launch of its mega integrated project -- Brigade Orchards, located at Devanahalli, Bangalore with an investment of Rs 2,000 crore (Rs 20 billion).
Shares of aviation companies rallied in trades today after the government said it would soon launch the process to allow foreign airlines 49% stake in Indian carriers.
Essar Oil tanked 11.5% to Rs 51 after the Supreme Court on Tuesday rejected the company's 125% sales tax deferment benefit claim on its investment in the Vadinar refinery project.
The broader markets underperformed the benchmark indices and the BSE mid-cap index ended down 65 points at 5,589 and the small-cap index shut shop at 6,196, down 63 points.
The overall market breadth was negative as 1,701 stocks declined while 1,087 stocks advanced.